The opinion of the court was delivered by: BARTELS
BARTELS, District Judge
Between April 27 and May 25, 1983, the grand jury returned five related indictments against eight defendants charging violations of the mail fraud statute, 18 U.S.C. § 1341, and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961 et seq. (RICO). The five indictments resulted from an investigation into arson-for-profit schemes in the New York metropolitan area. At the Government's behest each indictment was sealed upon its return and all five were unsealed on July 12, 1983. Defendants Holzer, Gold and Bilus move to dismiss various counts of their indictments as time-barred on the ground that they were improperly sealed. Holzer and Gold also seek dismissal because of pre-indictment delay in violation of their due process rights. The following table indicates the relevant dates and the relationships among the defendants appearing in the sealed indictments, all of which are crucial to an understanding of the legal issues.
Defendants by Indictment Returned 5 Years from Last Indictment
Indictment and Sealed Alleged Mailing Unsealed
CR-83-00178: 4-27-83 5- 3-83 (Ct. 2) 7-12-83
Slochowsky 5-26-83 (Ct. 4)
Holzer 6- 1-83 (Ct. 5)
Gold 5-19-83 (Ct. 6)
Donnelly 5-31-93 (Ct. 7)
CR-83-00179: 4-27-83 7-12-83
CR-83-00180 4-27-83 5-26-83 (Ct. 1) 7-12-83
Bilus 6- 1-83 (Ct. 2)
CR-83-00217: 5-11-83 7-12-83
CR-83-00233: 5-25-83 7-12-83
As the third column of the table indicates, the five-year statute of limitations (provided for in 18 U.S.C. § 3282) ran as to seven counts in two indictments while the indictments were under seal, thereby setting the stage for the defendants' claim that those counts are time-barred. To properly assess this claim, hearings were held at which Assistant United States Attorney Max Sayah testified as to the Government's reasons for requesting sealing. The facts adduced at the hearings are as follows:
The United States Attorney's Office for the Eastern District of New York began its investigation leading to the instant indictments when contacted in November, 1982 by Joseph Bald, the Government's principal witness and an unindicted coschemer. Bald, already serving an 8-1/3 to 25 years sentence for arson in Queens County, offered to testify concerning members of a large scale arson-for-profit ring in which he was a participant, as well as political corruption and securities fraud. After he received numerous threats while staying at the Metropolitan Correctional Center, the Justice Department placed Bald in the Federal Witness Protection Program in February, 1983. The press had reported rumors of Bald's cooperation and Bald believed, according to Sayah, that these threats originated with the defendants herein.
Bald's codefendants in the Queens arson case were James Blackwell and Alvin Donnelly (a/k/a "Kenneth Aska"), both of whom were fugitives from sentences of 8-1/3 to 25 years.In February or March of 1983 Donnelly and Blackwell contacted Sayah by telephone from an unknown location and offered to testify against the targets of the instant indictments and others in hope of negotiating a reduction of their state sentences. Sayah thereafter contacted the Queens County District Attorney's Office for that purpose, but the District Attorney opposed any sentence reduction. He did agree, however, to the surrender of Donnelly and Blackwell to federal authorities and their plea of guilty to a single count of mail fraud carrying a five-year sentence and to their continuing in federal custody for the remaining three and one-third years of their minimum state sentences.
This agreement between the two prosecutors served as the basis for negotiation between Sayah and the two fugitives over the next several months. In the course of approximately twenty telephone calls from Donnelly prior to April 27th, Sayah told Donnelly that he too was a target of the grand jury's probe into arson-for-profit and faced a possible RICO charge carrying a maximum twenty-year penalty. On the other hand, Sayah told them that if they surrendered at that time they would only be charged with mail fraud and not RICO violations and that they could serve their Queens sentences in federal prison.
At no time were Donnelly's and Blackwell's whereabouts known or discovered, although efforts were made to do so. At least on one occasion a specific surrender date was agreed upon and an attorney hired by Donnelly and Blackwell for that purpose (Kenneth Ramseur) called Sayah promising his clients' surrender. In anticipation of their surrender a complaint charging mail fraud was prepared. By April 27th, however, neither Donnelly nor Blackwell had surrendered and a bench warrant was issued against Donnelly who was charged, along with Slochowsky, Holzer and Gold, in a seven-count mail fraud and RICO indictment returned that day and sealed at Sayah's request. Blackwell was not indicted because, according to Sayah, the evidence against him was insufficient.
Sayah feared that disclosure of the indictment would reduce or "chill" Donnelly's willingness to surrender because it would eliminate his expectations of pleading guilty to a one-count mail fraud indictment and of serving his minimum state sentence in federal custody. The elimination of such expectations of Donnelly would place Sayah in a weaker position to bargain for Donnelly's surrender since the penalties facing Donnelly would then be far more severe. Naturally, Sayah was particularly concerned with obtaining Donnelly's cooperation because he was an "invaluable" witness as the "torch" of the arson-for-profit rings.
As to defendant Bilus, Sayah also testified that he had believed that disclosure of Bilus' separate indictment (not naming Donnelly) likewise would have impeded his efforts to "entice" Donnelly into surrendering. Donnelly allegedly also was the "torch" for the buildings which were the subject of Bilus's indictment for mail fraud. These same buildings were among the larger group of buildings included in the indictment against Donnelly and his three codefendants.Based on his experience as a prosecutor, Sayah felt that disclosure of the case against Bilus involving buildings "linked" to Donnelly would also hamper his efforts to secure Donnelly's surrender.
Donnelly, Blackwell and their lawyer contacted Sayah numerous times between April 27th and July 12th to further discuss surrender. Sayah did not disclose the existence of the five sealed indictments and did not misrepresent to Donnelly that he had not been indicted. Approximately two months after the first indictments were sealed, Sayah lost hope that Donnelly and Blackwell would probably surrender in the near future. Thus, on July 5th Sayah contacted the attorneys for Slochowsky, Gold, Holzer, Bilus, Katkin and Elliot to inform them of the sealed indictments and to have their clients appear in court for unsealing and arraignment on July 12th. At all relevant times the Government knew the whereabouts of these defendants and at no time did it fear that any of them would flee upon disclosure of the indictments.
The only other defendant deserving special mention is Srulowitz whose separate indictment did not name Donnelly. Sayah testified that Srulowitz's whereabouts were unknown prior to and at the time of his separate indictment on May 11th, on which date a magistrate signed an arrest warrant for him. Based on information from Bald the authorities believed that Srulowitz was in Israel or would flee there if still in the United States. Sayah therefore instructed agents of the Bureau of Tobacco, Alcohol and Firearms to locate Srulowitz. Later, in a telephone conversation in mid-June, Donnelly told Sayah that Srulowitz was living in Monsey, New York. Agents subsequently located him there, apparently without contacting him.Because the Government was not aware of any counsel retained by Srulowitz, an agent telephoned Srulowitz on July 5th and informed him to have counsel contact Sayah. This was done, and Srulowitz appeared in court with counsel on July 12th for unsealing and arraignment.
Soon after July 12th Donnelly again contacted Sayah once or twice and, according to Sayah, "vented his rage" about his indictment for a RICO violation. Following one and a half months of no contacts, Donnelly and Blackwell have recently resumed occasional telephone contact with Sayah, but both remain fugitives.
Thus, the Government presented three distinct reasons for sealing and keeping selaed the indictments. First and foremost, the Government feared that disclosure of the indictments would foreclose any chance of Donnelly and Blackwell surrendering and cooperating. As of April 27th, Donnelly stood indicted on the RICO count and six mail fraud counts carrying a total maximum penalty of fifty years imprisonment if given consecutive sentences. Second, until mid-June the Government believed that Srulowitz was in Israel and would not return if publicly indicted or would flee to Israel if in the United States. Third, the Government desired to keep the extent of Bald's cooperation secret until all the indictments had been returned and also to protect Bald against further threats.