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UNITED STATES v. SHEPPARD

January 7, 1985

UNITED STATES OF AMERICA, Plaintiff
v.
WILLIAM SHEPPARD, Defendant



The opinion of the court was delivered by: POLLACK

MILTON POLLACK, Senior District Judge

The defendant, William Sheppard, moves pursuant to Rule 33, Fed. R. Crim. P., to set aside his conviction on grounds of new evidence and fault of the government in producing documents before trial. He was convicted in September, 1982, of partnership in a scheme whereby $1,256,356.80 was embezzled from Bankers Trust Company by employees of the bank and laundered through Sheppard. The funds were embezzled in the form of two official bank checks and deposited in a bank account opened for purposes of the scheme by Sheppard. The money was converted into gold coins, then into cash, and finally divided among the co-conspirators.

Sheppard's five partners in the embezzlement all pleaded guilty to the conspiracy prior to trial; two pleaded guilty to one count of embezzlement, and one to the count of wire fraud. Three of Sheppard's business partners testified at the trial as government witnesses. Through their testimony, the testimony of a bank investigator, a questioned document examiner, and documentary evidence, as well as the testimony of Sheppard himself, who took the stand, he was firmly planted in the criminal partnership. Sheppard's conviction was unanimously affirmed by order of the Court of Appeals on May 19, 1983.

 This motion was made almost a year later, on the unsworn assertions of trial counsel for Sheppard, portions of the trial record, and documents which counsel had collected. The government responded promptly, pointing out the insufficiency of the attack on the judgment. A series of requests for an extension of the time for the defendant to reply were granted, and ultimately a new set of attorneys supplied papers comprising an affidavit of the trial lawyer, and a brief designed to set up their principal argument that the government's discovery before trial was faulty and had violated Sheppard's right to due process. Curiously, some of the allegedly undisclosed material was actually produced and used by Sheppard's counsel at the trial. The government has responded to the reply, both by affidavit and a brief.

 The government's affidavit and analyses of the issues, which are made part of this ruling, adequately demonstrate that the attempt to set aside the conviction lacks legal merit and is based on speculations which fail utterly to show that the jury would probably have acquitted Sheppard if the points now made had been additionally developed at trial. None of the points now made could possibly have overcome the solidly based record firmly planting the defendant in the embezzlement and laundering operation. The evidence of Sheppard's guilt was overwhelming.

 No fault on the part of the government has been shown with respect to data that Sheppard now claims was newly discovered and should have been furnished to him, for the reasons that: a) the government either never had such data; or, b) the data was not requested by Sheppard at any time, or fairly identified in any request for data by the defendant; or, c) could have been discovered sooner by the defendant himself with the exercise of due diligence in order to avail himself of Rule 33. The second-guessing which is now presented does not relate to anything for which Sheppard's counsel had made a sufficiently "specific request" for "particular" information. A request for corporate records in general could hardly constitute a "specific request" for a particular bank deposit slip, or particular checks deposited into a corporate bank account of the business in which he was engaged, especially so where the defendant himself was an authorized signatory of that bank account, and ultimately obtained information from the Bank, by himself, without difficulty. A careful scrutiny of the government's obligations under the informal open discovery suggestions of the court and the compliance therewith in advance of the trial show, unquestionably, that the government fairly and fully disclosed what it could anticipate the defendant might require during the trial. No Brady or apparent Agurs data was withheld. The best evidence of ample disclosure lies in the fact that no motion for further information was made.

 No Order Directing Discovery Exists

 Although defendant's papers speak of a "court order" to the parties to engage in discovery, in fact no such order was made. The discovery by the defendant came about through voluntary compliance by the government without any requests from defendant or need for intervention on the part of the Court. This hardly warrants charges of suppression of evidence by the government. The charge now that a few isolated pieces of documentary evidence would have been useful additionally for impeachment, or support of credibility, as the case may be, in isolated aspects of the overall case which could not be foreseen until particular witnesses had testified, gives little support for invoking a Rule 33 remedy.

 When the isolated matters complained of are placed in proper focus from which to evaluate the scattershot and unsupportable complaints which ground this motion, it readily can be seen that they have no bearing on the ultimate disposition of the case by the jury. The case against the defendant was too strong to have been influenced by these isolated matters.

 Overview

 The speciousness and shallowness of the matters on which the Rule 33 motion is made are at once made apparent by a review of the enormity of Sheppard's criminal conduct. The embezzlement and laundering operations charged in the indictment came about as follows.

 Bankers Trust Company held securities for customers on which interest or dividends were paid, to be distributed to the parties entitled thereto. The Depository Trust Company ("DTC") made payments thereof to Bankers Trust on behalf of corporations whose securities were being held by the Bank as custodian for the true owners to whom payments would be distributed. The items collected were reflected in a ledger or journal maintained by DTC containing thousands of bookkeeping or journal entries.

 Faulty allocation by Bankers Trust of those dividend and interest payments created in its hands a "pool" of money representing excess funds paid by DTC that had not been accounted for by Bankers Trust; the "pool," in 1981, as reflected in the DTC Dividends Received ledger, was in excess of $50 million. That "pool" was unclaimed money for which the holders of record were unknown.

 Certain New York employees of the Bank in the Securities Operations Division perceived that, were entries in the DTC ledger purged, there would be, pro tanto, an elimination of the source and amount of such collections and leave the Bank holding amounts attributable to the purged entries without identification of their owners or true claimants.

 The criminal scheme of embezzlement and laundering of the funds abstracted from the Bank ...


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