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United States v. Grammatikos

decided: September 5, 1980.


Appeal from a judgment of conviction entered in the United States District Court for the Eastern District of New York after trial before Hon. Edward R. Neaher and a jury pursuant to which a general verdict was returned finding appellant guilty of conducting a continuing criminal enterprise and of participating in two conspiracies to import and distribute controlled substances. In accordance with the criminal forfeiture provisions of 21 U.S.C. § 848(a)(2), the jury also returned a special verdict declaring two items of appellant's property to be forfeit. Affirmed as modified.

Before Lumbard, Oakes and Meskill, Circuit Judges.

Author: Meskill

John Grammatikos appeals from a judgment of conviction entered in the United States District Court for the Eastern District of New York after trial before Hon. Edward R. Neaher and a jury. A general verdict was returned declaring appellant guilty of having engaged in two distinct conspiracies, each involving the importation and distribution of controlled substances in violation of 21 U.S.C. §§ 963 and 846, and of having perpetrated those offenses by means of a continuing criminal enterprise contrary to 21 U.S.C. § 848. Pursuant to the enhanced penalties available under the latter provision, after the announcement of the general verdict the court posed interrogatories to the jury which, upon further deliberation, returned a special verdict adjudging two items of appellant's property to be forfeit. Grammatikos was subsequently sentenced to a 15 year term of imprisonment for his conduct of a continuing criminal enterprise and to lesser periods of incarceration for the two conspiracies, all of which were to run concurrently. On all three counts the district judge imposed lifetime terms of special parole.

Before this Court appellant seeks dismissal of his indictment, or alternatively, a remand for a new trial, on the ground that consensual tape recordings of his conversations with a government informant were improperly destroyed by the Drug Enforcement Administration. In addition, appellant assigns error to various facets of the court's jury instructions and further contends that the forfeiture is not sustainable because the indictment, contrary to Rule 7(c)(2) of the Federal Rules of Criminal Procedure, failed to specify the property susceptible to this penalty. Lastly, appellant seeks the voiding of the special parole terms on the ground that that sanction is not authorized under any of the criminal provisions for which he stands convicted. Save for the last of these assertions, we reject appellant's claims and affirm the judgment of conviction as modified.


The evidence presented at trial amply demonstrated that during the early 1970s, appellant utilized the contacts and expertise he had previously acquired as a merchant seaman to establish and operate a far-flung system for the procurement, importation and distribution of vast quantities of controlled substances, principally hashish. Appellant's modus operandi, which required the services of a large cast of supporting players, was to arrange for the acquisition, by an intermediary, of a sizeable quantity of hashish from sources in the Near East or North Africa, and to provide for its transit to Atlantic or Gulf ports upon merchant freighters, certain of whose crew members were in league with appellant. Another group of subordinates would then smuggle the drug shipment onto the United States mainland where it would be distributed throughout the East Coast and Canada by appellant's network. Thus, Count Two of the superseding indictment averred that from on or about January, 1971, until approximately April, 1974, appellant masterminded a sophisticated and wide-ranging conspiracy to import and distribute multi-ton quantities of hashish. In support of this claim, the government presented the testimony of four unindicted coconspirators, each of whom vividly illuminated one or more of the phases of the drug operation.*fn1

The success of this scheme emboldened Grammatikos in 1975 to conceive an even more grandiose plan whereby large amounts of controlled substances, including more profitable drugs such as heroin and cocaine, would be imported and distributed. The grand jury charged in Count Three*fn2 of the superseding indictment that from October, 1975, until May, 1976, appellant and others conspired to perpetrate a series of drug offenses, the most ambitious of which was a plan to transport over five tons of hashish and 100 kilograms of heroin from Beirut to American coastal waters aboard a yacht which appellant's earlier trafficking had enabled him to purchase. The cargo was then to be dispersed among a fleet of fishing vessels which would smuggle the controlled substances ashore. Additionally, the government postulated and the evidence revealed that other schemes were launched pursuant to this conspiracy, including a plan for the importation of 200 pounds of South American cocaine and the retrieval from the constructive possession of Roger Stowe, one of appellant's associates, of 155 pounds of hashish following Stowe's arrest and imprisonment in Canada in April, 1976. Save for the recovery of Stowe's hashish cache, neither of appellant's other ventures, charged as part of the conspiracy set forth in Count Three, reached fruition.

These charges were substantiated in large measure by one Fleming Budal, a paid government informant who had originally been recruited by appellant to organize and direct the flotilla which was to be used to off-load and smuggle ashore the hashish and heroin arriving on appellant's yacht from his Lebanese supplier.*fn3 Budal's testimony was corroborated by his supervising agent, William Simpkins of the Drug Enforcement Administration (DEA), and by the information gathered through a wiretap which had been placed by Canadian authorities, pursuant to court order, upon the telephone of appellant's chief lieutenant in Montreal, Francois Alario.

Throughout his involvement with appellant, Budal was under the supervision of Agent Simpkins who operated out of the agency's Boston office. At that time, the DEA was engaged in an investigation of certain drug trafficking, focusing principally upon the activities of Roger Stowe and others, and listing appellant as a "related subject." From time to time in the course of his assignment, Budal was supplied by Agent Simpkins with cassettes with which to record telephone conversations with various conspirators. Budal taped between ten and twenty conversations with appellant and several others with Stowe. After having made these recordings, Budal would meet with Agent Simpkins at some place between Budal's Cape Cod home and his supervisor's Boston office. Agent Simpkins testified that, having returned to DEA headquarters, he would make a copy of the recording, and then place the original in an evidence pouch for storage with the agency's evidence custodian. He thereafter would replay the copy "numerous times," and make detailed handwritten summaries of the conversations before erasing his duplicate of the recording.

In February, 1978, the United States Attorney for the District of Massachusetts declined prosecution of Stowe and others for the activities which included certain facets of the conspiracy set forth in Count Three of the superseding indictment. This decision was based in part upon the fact that the principal targets of the investigation had been successfully prosecuted elsewhere, and in part because of the distaste of law enforcement officials there to proceed against unconsummated or sterile conspiracies. With respect to appellant, a "related subject" of the Boston investigation, the DEA's report closing the case noted, "Current investigative status shows (Grammatikos) to be under investigation in Region 2 (New York) with hopeful prosecution within the Eastern District of New York." That "hopeful prosecution" referred to an investigation of Grammatikos in New York for an entirely unrelated narcotics scheme involving the importation and distribution of heroin in the metropolitan area. In accordance with agency practices, Agent Simpkins on February 28, 1978, completed a number of DEA Form 48s, directing the custodian of evidence to dispose of all evidence relating to the aborted Boston inquiry. Prior to submitting these reports, Agent Simpkins notified his counterpart in New York, Agent Brian Noone, of his intention to destroy the evidence accumulated by the Boston office. Agent Noone voiced no objection. The Budal tapes were actually disposed of some five months later, on July 20, 1978.

On April 25, 1978, an indictment was handed up in the Eastern District of New York charging appellant with conspiracy to import and distribute approximately five kilograms of heroin. The indictment was sealed and a bench warrant issued for appellant's arrest. In February, 1979, a five-count superseding indictment was filed and ordered sealed, charging appellant with continuing criminal enterprise, with the two conspiracies described above, and with two conspiracies involving the importation and distribution of heroin. Appellant was eventually apprehended and arraigned on April 6, 1979, and the superseding indictment unsealed. On July 30, 1979, the United States Attorney in a letter to appellant's counsel specified fourteen items of property as to which the government would seek forfeiture as authorized under the enhanced penalties provided under the continuing criminal enterprise statute, 21 U.S.C. § 848(a) (2). The superseding indictment indicated that forfeiture would be sought, but no property was specifically identified as being subject, upon conviction, to government seizure.

Trial commenced before Judge Neaher and a jury in August, 1979. After hearing Agent Simpkins' testimony, and following a lengthy colloquy among court and counsel, Judge Neaher denied appellant's motion to preclude Budal from taking the stand on the ground of the government's failure to preserve the Budal tapes. Additionally, the court permitted the government to mark the handwritten summaries of the recorded telephone conversations for identification, and cautioned defense counsel that should reference be made to the government's disposal of the tapes, the prosecution would be allowed to introduce into evidence the handwritten summaries.

After roughly two and one-half weeks of trial, the court dismissed one of the heroin charges and the jury was unable to reach a verdict with respect to the counts submitted to it. Retrial commenced in September, during the course of which Judge Neaher dismissed the remaining heroin conspiracy. The jury returned a guilty verdict with respect to the other counts, and subsequently, was asked to respond to interrogatories posed by the court concerning the susceptibility to forfeiture of nine of the fourteen items of appellant's property previously specified by the government. Following further deliberations the jury returned a special verdict adjudging appellant's yacht "Happy Days" and a discotheque-motel located in Chalkis, Greece, to be subject to forfeiture. Appellant was thereafter sentenced as previously indicated.


A. The Government's Failure to Preserve the Budal Tapes.

Appellant seeks dismissal of his indictment, or alternatively, a remand for a new trial with instructions to bar the testimony of Fleming Budal, on the ground that appellant was irreparably prejudiced by the government's destruction of the Budal consensual tape recordings, which constituted discoverable material under a combination of Rule 16, Fed.R.Crim.P. and Section 3500 of the Jencks Act. United States v. Miranda, 526 F.2d 1319, 1327 (2d Cir. 1975), cert. denied, 429 U.S. 821, 97 S. Ct. 69, 50 L. Ed. 2d 82 (1976); United States v. Crisona, 416 F.2d 107, 114-15 (2d Cir. 1969), cert. denied, 397 U.S. 961, 90 S. Ct. 991, 25 L. Ed. 2d 253 (1970). Grammatikos argues that the tapes were critical to his defense because they may have provided a rich source of material with which to impeach Budal's credibility. Reliance is chiefly placed upon United States v. Bufalinob, 576 F.2d 446 (2d Cir.), cert. denied, 439 U.S. 928, 99 S. Ct. 314, 58 L. Ed. 2d 321 (1978), decided after Agent Simpkins had issued the directive to destroy the Budal tapes but before that order had been implemented, and Bufalino's predecessor, United States v. Miranda, supra. Those holdings, while declining to reverse convictions in ...

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