UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
March 4, 1982
UNITED STATES OF AMERICA,
JOSEPH MANNINO, Defendant
The opinion of the court was delivered by: LOWE
MEMORANDUM OPINION AND ORDER
MARY JOHNSON LOWE, D.J.
An indictment has been returned against defendant Joseph Mannino ("Mannino") charging him with the crimes of conspiracy (18 U.S.C. § 371); false statements (18 U.S.C. §§ 1014 and 2); mail fraud (18 U.S.C. §§ 1341 and 2); and transportation of stolen property (18 U.S.C. §§ 2314 and 2). The indictment alleges that defendant, an officer of Compratt Construction Corporation ("Compratt") and Luman Equipment Corporation ("Luman"), acting with one Lucera and others, caused the corporations to issue false vendor invoices which were presented to various banks in order to obtain lease financing.
Defendant has moved this Court to suppress: (1) statements he is alleged to have made to FBI agents on or about November 1, 1978; (2) documents he turned over to the government; and (3) statements he is alleged to have made to an Assistant United States Attorney on October 30, 1979. The government opposes the motion.
For three years the government had been investigating OEM Capital Corp. ("OEM"), a corporation engaged in arranging lease financing for companies that wanted to finance the purchase of equipment.
The indictment alleges that Compratt and Luman provided false vendor invoices to OEM which were used in support of applications to various banks for lease financing. In late October, 1978, FBI Agent Donald Johnson called Mannino and Lucera to arrange an appointment to discuss OEM and Herbert Wolf.
Agent Johnson, his partner, FBI Agent Mitchell, Mannino and Lucera met on November 1, 1978 at the Compratt offices in Connecticut.
Agent Johnson testified that after he introduced himself and his partner, Lucera asked whether he and Mannino were targets of the investigation. Johnson said "No." Lucera then asked if they were in any trouble. Johnson replied: "You tell me." Johnson asked for and Mannino gave him blank stationery of Compratt and Luman.
Mannino said he had contracted for a construction job for a company, Hattie Carnegie, and that Herbert Wolf had assisted him in seeking financing. Mannino made other incriminating statements.
Mannino testified that after Johnson told him that the agents were investigating OEM, he asked how he could help them. Johnson said that he was looking for Mannino's cooperation. When asked by Mannino if he and Lucera were involved, Johnson replied that they were not targets and were not being investigated, nor were they going to be indicted. The conversation with the agents continued for two or three hours.
Defendant Mannino argues that the statements made and documents turned over to the government were the product of a promise by Agent Johnson of immunity. The government contends that, even if Mannino's version of the events is accepted by the Court, Agent Johnson's conduct does not amount to a grant of immunity.
The Fifth Amendment to the United States Constitution prohibits the use as evidence against a person in a subsequent criminal proceeding statements made or evidence disclosed by the defendant as a result of compulsion. The term compulsion, in Fifth Amendment analysis, has been held to include evidence induced under a governmental promise of immunity. Shotwell Manufacturing Co. v. United States, 371 U.S. 341, 347, 9 L. Ed. 2d 357, 83 S. Ct. 448 (1963). The inquiry in this case is whether Agent Johnson's statements amounted to a promise of immunity.
Mannino cites United States v. Denno, 259 F. Supp. 784 (S.D.N.Y. 1966) in support of his immunity claim. However, Denno is clearly distinguishable. Judge Weinfeld in deciding Denno found that detective Pickett told petitioner Caserino that the prosecution wanted and needed his help, and that it:
'wanted his statement only as a witness' . . . that 'no charges would be brought against him,' and that 'you will never go to trial in this case'.
Id. at 790. Judge Weinfeld further found that those promises were reasonably understood by petitioner as an assurance in exchange for his statements.
The record in this case does not support such a finding. The credible evidence, on the hearing, supports the conclusion that Mannino was told that he was not a target of the investigation, and that the agent wanted his help. The Court further finds that Agent Johnson did not tell Mannino he would not be indicted and did not use trickery or deception to secure Mannino's cooperation. On November 1, 1978, the investigation of the lease financing fraud was ongoing and the focus of the investigation was OEM and its officers. There was no misstatement or concealment of fact as found in United States, ex rel. Everett v. Murphy, 329 F.2d 68, 70 (2d Cir.), cert. denied, 377 U.S. 967, 84 S. Ct. 1648, 12 L. Ed. 2d 737 (1964). Nor had custody attached such as to trigger advice of "Rights," Miranda v. Arizona, 384 U.S. 436, 444, 478, 16 L. Ed. 2d 694, 86 S. Ct. 1602 (1966).
For the above reasons the defendant's motion to suppress statements made on November 1, 1978 and documents given to the government at that time and subsequent thereto is in all respects denied.
Rule 11(e)(6)(D) Claim
Mannino alleges that on October 30th, 1979 he, Lucera and their attorneys met with Assistant United States Attorney Richard A. Mescon for the purpose of plea negotiations. Therefore, any statements made by him during that conference, he claims, are inadmissible at his trial under 11(e)(6)(D) of the Federal Rules of Criminal Procedure. The government contends that the October 30th conference did not constitute a plea negotiation within the meaning of Rule 11(e)(6)(D) and that Mannino's statements are therefore admissible.
Mannino's attorney Jennings testified that in a telephone conversation with FBI Agent Price on May 25, 1979, he was told that the person with whom he was to discuss the possibility of his client's testifying under a grant of immunity was Mr. Johnson of the FBI or the Assistant U.S. Attorney. Jennings spoke with Assistant U.S. Attorney Mescon by telephone on May 29, 1979. Jennings arranged a June 1st meeting at Mescon's office for Mannino, himself and Mescon.
The following day, Mescon telephoned Jennings to postpone the meeting and told him that Mannino and Lucera had incriminated themselves during their meeting with the FBI agents in Danbury in November 1978. According to Jennings, Mescon said: "Your clients may have some exposure . . . ."
"Their previous confession amounts to aiding and abetting false loan applications." "The cat may be out of the bag . . . ."
Jennings reported that Mescon said Mannino and Lucera "may have some value as possible witnesses" and therefore that, "'I will still talk to you.'"
However, because Mannino and Lucera now "'may have some exposure,' . . . our [the U.S. Attorney's office] inclination is probably that we would want some sort of plea."
The plea that was to be discussed was still vague and subject to negotiation because, according to Jennings, Mescon only "mentioned that he would want one count of something . . . ."
At that early stage, Jennings testified that he had not yet discussed "how many counts or what the possible crime would be . . . ."
On June 4, 1979 Jennings met with Mescon and Johnson. Mescon decided that Mannino and Lucera should not be present. Jennings testified that he went to the meeting to negotiate a plea. He informed Mescon that he knew he was going to make certain statements which were factual in nature and wanted to set the ground rules, that his statements were made in a spirit of negotiation and could not be used against his clients.
Jennings was succeeded by local counsel in New York City: Gerald Feldman as attorney for Mannino, and Arthur B. Kramer as counsel for Lucera. On the first day of hearings, Kramer testified that prior to the October 30, 1979 meeting with Mescon, see slip op. at page 7, supra, he was constantly suggesting to Mescon that a deal could be made under which Mannino would be indicted and plead guilty, and Lucera would be granted immunity and testify for the government.
However, in testimony given on the second day of hearings, Kramer stated that he had no present recollection that Mannino's name was ever mentioned by either himself or Mescon in the context of a plea of guilty, prior to the October 30th date, either when he had face-to-face discussions with Mescon
or over the telephone.
Mannino testified that before the October 30th meeting he met Kramer four times in Kramer's office. The first such meeting was in early July when Lucera retained Kramer. Mannino testified that on August 8, 1979, he, Lucera, Kramer, and Feldman met again in Kramer's office. Kramer and Feldman told him that they had previously met Mescon (either jointly or separately). According to Mannino, Kramer said that Mannino and Lucera could make a deal whereby Mannino would plead guilty to certain charges -- which would have to be discussed at a later date -- and Mannino would testify against Wolf and OEM, and Lucera would agree to testify and cooperate in exchange for immunity for Lucera, Compratt and Lumen. Mannino and Lucera asked the attorneys to set up a meeting so that they could discuss with Mescon the immunity, and, if not the immunity, then the plea of guilty with all the other terms that Kramer had stated. Kramer's response was that there was no way the government would even consider immunity, and that they should set up a meeting to discuss a plea [by Mannino].
On more than one occasion before the October 30th meeting, Mannino testified, Kramer told Mannino that, based upon the information Mannino and Lucera had given him with respect to the November 1, 1978 meeting with the FBI and the documents Mannino had given the FBI on May 23 or May 24, 1979, Mannino's chances at trial were a thousand to one and that the best thing to do was to take the deal that Kramer had presented to him.
Mannino further testified that the day of the October 30th meeting, Mannino, Lucera, Kramer and Feldman met in Feldman's office. Feldman set out the agenda for the meeting with Mescon. First, Feldman would discuss the reasons why Mannino and Lucera should be granted immunity. If the government would not accept the plea for immunity, they would discuss the deal whereby Mannino would plead guilty and the charges as to which he would have to plead. Kramer's response was that it was a waste of time to discuss immunity and that they should begin by stating that they were prepared to accept the deal and then inquire as to what the specific charges Mannino would be required to plead.
Defendant Mannino argues that the conference which took place on October 30th with Mescon was a plea negotiation with an attorney for the government, and that any statements made by him are inadmissible under Rule 11(e)(6)(D).
The government argues that although Rule 11(e)(6)(D) would otherwise govern the question of admissibility of Mannino's October 30th statements, the Rule is inapplicable because the conference with Assistant U.S. Attorney Mescon was not a "plea discussion." The defendant's purpose, the government contends, was to convince the government not to indict either suspect. It was:
a last ditch effort by counsel for Mannino and Lucera to persuade the government that they should not be indicted at all.
The government further contends that the parties at the October 30th conference did not seek to obtain concessions in return for an offer to plead guilty.
This Court finds defendant's position persuasive.
Subdivision (D) of Rule 11(e)(6) addresses "any statement made in the course of plea discussions with an attorney for the government which do not result in a plea of guilty . . . ."
Prior to the amendment of Rule 11(e)(6)(D) in December 1981, the Fifth Circuit Court of Appeals in United States v. Robertson, 582 F.2d 1356, 1364-68 (5th Cir. 1978) set forth a two-tiered test to determine whether the statements made by a defendant were in fact and in law the product of plea negotiations.
As the Fifth Circuit explained:
To determine whether a discussion should be characterized as a plea negotiation and as inadmissible, the trial court should carefully consider the totality of the circumstances. Thus, each case must turn on its own facts.
. . . .
The trial court must apply a two-tiered analysis and determine, first, whether the accused exhibited an actual subjective expectation to negotiate a plea at the time of the discussion, and, second, whether the accused's expectation was reasonable given the totality of the objective circumstances.
Id. at 1366.
Although this Circuit has not adopted the two-tiered analysis of Robertson, in cases in which it has considered Rule 11(e)(6)(D) the Circuit has focused upon the Robertson factors, i.e., whether the defendant in fact believed he was negotiating a plea at the time of the admissions and whether the expectation was reasonable. In United States v. Levy, 578 F.2d 896, 901 (2d Cir. 1978), the Court stated:
Plea bargaining implies an offer to plead guilty upon condition. The offer by the defendant must, in some way, express the hope that a concession to reduce the punishment will come to pass. A silent hope, if uncommunicated, gives the officer or prosecutor no chance to reject a confession he did not seek. A contrary rule would permit the accused to grant retrospectively to himself what is akin to use immunity.
The Court further explained:
On the other hand, the purpose of Rule 11(e)(6) should not be forgotten. The purpose is to encourage plea bargaining, a system thought by many, though others disagree, to be desirable. We recognize that in the light of Santobello v. New York, 404 U.S. 257, 92 S. Ct. 495, 30 L. Ed. 2d 427 (1971), care must be taken lest roadblocks be set in the way of easy access to the system. We think that the purpose can best be served if the accused is required, at least, to make manifest his intention to seek a plea bargain before he takes the route of self-incrimination. See Hutto v. Ross, 429 U.S. 28, 97 S. Ct. 202, 50 L. Ed. 2d 194 (1976).
We need not decide, on this appeal, whether or in what circumstances, admissions by a defendant will be suppressed when they are part of a de facto process of plea bargaining even though it is less than formal. Cf. United States v. Herman, 544 F.2d 791 (5th Cir. 1977) (statement to postal inspectors); and cf. United States v. Smith, 525 F.2d 1017, 1021 (10th Cir. 1975) (to policemen). For Levy made his offers of cooperation and attendant admissions without attaching any condition to his admissions.
The record amply supports a finding that Mannino's former counsel, Jennings, informed the Assistant U.S. Attorney that he was initiating plea discussions on behalf of Mannino.
After attorney Feldman substituted as counsel for Mannino, the Court finds that Mannino, during the course of many conversations with the defense lawyers and Lucera, believed he was discussing an appropriate plea offer. The Court further finds that Mescon, after being put on notice by Jennings that Mannino was attempting to negotiate a plea, did not reject the prospect but continued negotiations with the attorneys from June 4, 1979 until sometime after the October 30th meeting, when he accepted Lucera's offer to testify for the government in exchange for not being indicted.
The Court does not credit the testimony of Mr. Kramer on the second day of hearings, not only because it is totally inconsistent with his prior testimony (see note 4, supra), but because the prior testimony is consistent with: (1) a memorandum he made after the October 30th conference;
(2) other testimony he gave concerning the meeting;
(3) events subsequent to October 30th;
and (4) reasonable inferences that may be drawn from the testimony of Agent Johnson.
The Court finds upon all of the credible evidence that Mannino engaged in the October 30th conference with Assistant U.S. Attorney Mescon for the purpose of securing a concession from the government that he not be indicted, and if that offer was refused, that he enter an acceptable plea in exchange for his testimony and that of his partner Lucera. The Court therefore finds that statements made by Mannino during the October 30th conference were made during plea bargaining with an attorney for the government and are inadmissible against him on trial unless he waived the protection of Rule 11(e)(6)(D).
The government argues that even if the statements made by Mannino are within Rule 11(e)(6)(D). They are nevertheless admissible against the defendant at trial because Mannino waived the protection of the Rule. The defendant argues that the record does not support any finding of waiver.
Kramer testified that at a strategy meeting on October 30th, the four participants (Kramer, Feldman, Lucera and Mannino) had agreed that Lucera and Mannino would throw themselves on the mercy of the government in an open fashion that would be completely on the record. He also testified that Feldman, at the outset of the meeting in Mescon's office, stated that the meeting was on the record and that the clients had nothing to withhold. Kramer's contemporaneous memorandum (Ex. 3) states that the conference was on the record. Agent Johnson testified that Mescon said the meeting would be "on the record" and that Feldman and Kramer agreed.
Mannino testified that at the meeting in Feldman's office prior to the conference with Mescon, Feldman said the Mescon conference "was to be completely off the record" and that he, Mannino, understood that to mean "whatever we said couldn't be held against us."
He further testified that at the meeting with Mescon, none of the participants made any statement whether the meeting was to be on or off the record. Mannino testified that Rule 11 was not mentioned in words or substance nor did anyone ask him, Mannino, whether he waived his rights under Rule 11. He stated that he did not agree, in words or substance, that what he said at the October 30th meeting could be used against him.
The appropriate standard to be applied to a claim of waiver of inadmissibility of statements made during a plea negotiation is either the traditional voluntariness standard based on the totality of circumstances
or the "knowing and intelligent waiver" standard.
The proper choice requires an examination of the policy considerations sought to be effectuated by Rule 11(e)(6)(D).
Mr. Justice Stewart explained in Schneckloth v. Bustamonte, 412 U.S. 218, 36 L. Ed. 2d 854, 93 S. Ct. 2041 (1973) that the much more stringent "knowing and intelligent waiver" standard
was articulated in a case involving the validity of a defendant's decision to forgo a right constitutionally guaranteed to protect a fair trial and the reliability of the truth-determining process.
Id. at 236. He distinguished the voluntariness standard as one which is applied to the waiver of those rights which have nothing to do with promoting the fair ascertainment of truth at trial or the integrity of the fact finding process.
In such circumstances, the Court held that, in order to "preserve the fairness of the trial process," a heavy burden would be placed on the government before waiver could be found. Id. The "knowing and intelligent waiver" test was limited by the Court, however, "to those rights which the Constitution guarantees to a criminal defendant in order to preserve a fair trial." Id. at 237 (footnote omitted). Such rights include the right to counsel, the right to confrontation, the right to a jury trial, and the right to be free from double jeopardy. Significantly, the Court observed that guilty pleas "have been carefully scrutinized to determine whether the accused knew and understood all the rights to which he would be entitled at trial, and that he had intentionally chosen to forgo them. Id. at 238.
Although the rule of inadmissibility contained in Rule 11(e)(6)(D) is of congressional rather than constitutional origin, Mr. Justice Stewart's analysis of guilty pleas may be applied with the same cogency to determine the standard for waiver applicable to the instant case. Plea bargaining under Rule 11(e)(6)(D) is essentially an offer by the accused to enter into a compromise with the government, whereby his liability or punishment for admittedly criminal conduct will be diminished in exchange for information which leads to the prosecution and conviction of others.
As a pre-condition of the plea bargain, the accused is required to be truthful about his own complicity -- i.e. to acknowledge his guilt. In order to encourage the fruitful exchange of information, the rule protects the accused from the admissibility, on trial, of his statements during plea bargaining. If the promise of inadmissibility were not expressly guaranteed, the process would have little efficacy because the plea bargaining admissions would make a subsequent trial little more than an inquest.
For this reason, waiver of inadmissibility in the plea bargaining context is closely analogous to waiver in the context of a guilty plea. Therefore this Court finds that plea bargaining waiver claims should be governed by the same standard -- the intentional relinquishment or abandonment of a known right. The burden is upon the government to establish waiver. Schneckloth v. Bustamonte, supra at 236.
The evidence at the hearing was in conflict as to whether the attorneys said the October 30th meeting was "on the record" or "off the record." Even if this Court finds that the attorneys present stated that the meeting was "on the record," such a finding is not dispositive of the issue herein. The government stipulated at the hearing that it would not offer any testimony that Mannino said anything about waiving his rights. Therefore, this Court must find that Mannino made no express waiver.
The Court recognizes that, under some circumstances, an accused may by conduct waive a right. However, the government's burden is great, and the Court must presume that a defendant did not waive his rights. North Carolina v. Butler, 441 U.S. 369, 373, 60 L. Ed. 2d 286, 99 S. Ct. 1755 (1979). We must consider whether, under the particular facts and circumstances of this case, including the background, experience and conduct of Mannino, Mannino knew that his statements were to be used against him at trial, and with this knowledge inculpated himself.
The record shows that Mannino had never before been in conflict with the law. Over a course of months, prior to October 30th, beginning with Attorney Jennings, Mannino sought to plea bargain in hope of avoiding indictment or, at worst, of pleading guilty to something in order to avoid trial. Although Mannino testified that he knew the meaning of the phrase "on the record," he did not hear any of the attorneys at the October 30th meeting use that phrase. This Court is persuaded on this record, that the government has not proven that Mannino knowingly and intelligently waived the right of inadmissibility of plea bargaining statements contained in Rule 11(e)(6)(D). The motion to suppress the defendant's statements made to the government attorney at the October 30th plea bargaining conference therefore is granted.
Defendant's motion to suppress statements he allegedly made to FBI agents on or about November 1, 1978, and the documents he turned over to the government at that time, is denied. The motion to suppress statements made to Assistant U.S. Attorney Mescon on October 30, 1979 is granted.
It Is So Ordered.