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UNITED STATES v. DAVIS

June 20, 1984

UNITED STATES OF AMERICA, against GEORGE G. DAVIS, Defendant.


The opinion of the court was delivered by: HAIGHT

MEMORANDUM OPINION AND ORDER

HAIGHT, District Judge:

Defendant George G. Davis was convicted after a jury trial of one count of conspiracy in violation of 18 U.S.C. § 371. Prior to trial, defendant moved to dismiss the indictment pursuant to Rule 6(e), Fed.R.Crim.P., on the ground that he had been unduly prejudiced by the Government's improper sealing, and unreasonable delay in unsealing, the indictment. The claimed prejudice arose from the death of two allegedly exculpatory witnesses, one Jerry Shanks and one Martin Hambrose.

 In this Court's opinion of April 2, 1984, familiarity with which is assumed, I concluded that the Government's sealing of the indictment and the timing of the subsequent unsealing were entirely proper. With respect to the question of prejudice, defendant Davis contended that the testimony of the now-deceased Hambrose and Shanks would have been instrumental in undermining the credibility of his co-defendant Gerald Lee, now a cooperating witness. Specifically, their accounts of two brief conversations engaged in by Lee and Davis were expected to reveal inconsistencies between Lee's testimony at trial and prior statements he allegedly made.In short, defendant argued that pursuant to Rule 613, Fed.R.Evid., Lee could be cross-examined as to statements made in the presence Shanks and Hambrose and they could be called to discredit his testimony.

 The force of defendant's admissibility argument depended, of course, on the accuracy of his speculations regarding Lee's testimony. The anticipated testimony was described as follows:

 "Lee would testify on direct that David received $30,000.00 as a payoff in the South Carolina deal. That Bose had no part in it. Lee would deny he told Davis, before Shanks or Hambrose, that Bose was a participant." (Def. Br. at 7).

 The testimony of Shanks and Hambrose, on the other hand, would purportedly support defendant Davis's position that "he was not paid off and that any deal was between Lee and Bose." (Id.). As stated in this Court's prior decision:

 "Obviously, we cannot tell what Lee's testimony, on direct or cross, will be until he gives it. If that testimony emerges in a fashion other than Davis predicts, the argument under Rule 613 may well be undermined. That would arguably occur, for example, if Lee testified that David and Bose were co-venturers in Mamoni Shipping Co., and jointly benefited from illicit payments generated by the "south Carolina deal."

 "Since a defendant's burden in cases of this nature is to demonstrate "substantial actual prejudice," Muse, at 1043, I have concluded that the position can only be properly evaluated at the end of trial, and in the event of a conviction of Davis. At that time we will know just what Lee's testimony was on the pertinent points, as well as the totality of the evidence against Davis." (Mem. Op. of April 2, 1984, at 13).

 Accordingly, defendant's motion to dismiss was denied without prejudice to renewal after trial, at which time the Court would be in a better position to assess the actual prejudice to defendant's case.Defendant now renews his motion to dismiss the indictment and, in the event that application is denied, seeks a hearing to determine what efforts were made by the Government to aprehend Gerald Lee following the sealing of the indictment. With respect to the latter application, I have already carefully considered the circumstances giving rise to the sealing of the indictment and adhere to my earlier ruling that the Government acted properly and in aid of a legitimate prosecutorial need. See United States v. Muse, 633 F.2d 1041 (2d Cir. 1980) (en banc), cert. denied, 450 U.S. 984, 67 L. Ed. 2d 820, 101 S. Ct. 1522 (1981). The unsupported assertion that the Government's efforts to apprehend Lee were undertaken in connection with the 1983 indictment, but not in connection with the instant indictment, is entirely unpersuasive. Indeed, having determined that the Government acted reasonably and in good faith in procuring a sealed indictment, leave to renew the motion to dismiss was limited to the narrow question of whether actual prejudice to defendant occurred during the period when the indictment was sealed. See Muse, supra; United States v. Slochowsky, 575 F. Supp. 1562, 1567 (S.D.N.Y. 1983) ("If there is a legitimate prosecutorial need for the sealing, the defendants, to be entitled to dismissal, must be able to demonstrate actual prejudice occurring between the date of the sealing and the date of the unsealing.").

 With that question in mind, I turn first to the testimony of Gerald Lee regarding Interchange Design, Sukhamay Bose, and the now-disputed $30,000 payoff. At trial, Lee testified that Davis was the instigator of the Interchange Design scheme, the first to suggest the fraudulent means -- i.e., the creation of a dummy corporation -- whereby the co-conspirators could get their hands on "a windfall . . . coming to the company." (Tr. at 384-85). Once the scheme was implemented and funds were coming in, Lee testified that he "sat down and figured out how to divide [the profits] amongst the officers involved." (Tr. at 385). George Davis's alloted portion was $30,000, and Davis requested that the amount be delivered to him in the form of a check made out to a shipping company. (Tr. at 385-86). On cross-examination, Lee stated that he knew Sukhamay Bose only as "a gentleman who we signed a fraudulent consulting agreement with" (Tr. at 436); he knew of no connection between Bose and Mamoni Shipping Company. (Id.). Lee testified further that he was acquainted with Jerry Shanks, had on occasion seen him and greeted him in Pete's Tavern, but had never transacted business with him in that restaurant.(Tr. at 439-40). The name Martin Hambrose was not familiar to Lee, and he had no memory of a luncheon engagement with Hambrose in 1976. (Tr. at 440-41).

 Defendant argues that the testimony of both Shanks and Hambrose would have called into question the veracity of Lee's version of events. More specifically, according to defendant, Shanks would have testified that, in mid-1977, he was at the bar in Pete's Tavern with George Davis when Lee presented Davis with a $30,000 Interchange Design check made out to Mamoni Shipping Company, reminding Davis that, "as they had previously discussed, some money was due to Bose." (Hollman Aff. P29). Davis purportedly told Lee that "he remembered that being a problem," pocketed the check, and said he would take care of it. (Id.). Defendant argues that Shanks's testimony would indicate that Davis was merely a courier of sorts -- i.e., that the $30,000 check was intended for Bose, not Davis, apparently in connection with some unrelated transaction. Such testimony would be contrary to Lee's assertions regarding Davis's participation in, and profit from, the Interchange Design scheme.

 Hambrose's testimony, according to Davis, would further support defendant's version of events. Hambrose purportedly would testify that, at a luncheon meeting with Davis and Lee in 1977, Lee was called away from the table to take a telephone call and returned in a highly agitated state. The explanation for his agitation, according to Hambrose's anticipated testimony, would be that Bose was "trying to screw him" by demanding money in addition to the $30,000 check that Lee had already given Davis to turn over to Bose. Hambrose's testimony would further indicate that Davis told Lee he remembered the $30,000 check and that "Bose now had the money." (Hollman Aff. P32). This testimony, defendant argues, would demonstrate that Davis was not a party to any payoff between Lee and Bose.

 The Government continues to argue, with some force, that Davis's claim of prejudice is premised on a purely speculative, and highly unlikely, assertion of what Shanks's and Hambrose's testimony would actually be. Counsel for defendant, in an initial telephone call with Shanks prior to his death, learned only that Shanks "was familiar with the South Carolina matter, and knew of Shuk Bose." (Hollman Aff. P30). Although Shanks indicated that he was friendly with defendant Davis and would be willing to talk further with Mr. Hallman, there was no discussion of the Pete's Tavern encounter. Hambrose, who died in 1982, was never initially interviewed. This is not, in other words, a situation where defense counsel elicited from now-unavailable witnesses some concrete indication of what their testimony would be. Rather, defendant's claim of prejudice turns on the presumption that Shanks and Hambrose would share his apparently vivid memory of two brief conversations overheard some seven ...


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