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UNITED STATES v. PRESLAR

April 12, 1985

UNITED STATES OF AMERICA,
v.
IVAN T. PRESLAR, II, a/k/a IVAN T. PRESLAR, TIMBERLINE STOVES NORTHEAST, INC., ROBERT M. WEICHERT, ADIRONDACK WOOD STOVE WORKS, INC., TIMBERLINE EAST, Defendants



The opinion of the court was delivered by: MUNSON

MEMORANDUM-DECISION AND ORDER

HOWARD G. MUNSON, CHIEF UNITED STATES DISTRICT JUDGE

 On October 19, 1984, a federal grand jury returned a seven count indictment against the above-named defendants, charging them variously with bankruptcy fraud and related offenses in violation of 18 U.S.C. § 152. More specifically, the Government alleges that defendants Preslar and Weichert engaged in a criminal conspiracy to conceal the assets Of a bankrupt corporation by transferring its inventory, cash and other property to a separate and distinct solvent corporation. All of the overt acts contained in the indictment are alleged to have occurred between August 1, 1981 and October 1, 1981.

 Presently before the court are motions by both defendants to dismiss the indictment on the ground that their prosecution is barred by the Government's constitutionally impermissible delay in bringing the instant charges. See Rule 12, Fed. R. Crim. P. Additionally, defendant Preslar has moved pursuant to Rule 12 to dismiss the indictment "in the interests of justice" on the ground that his prosecution by the Government violates an express plea agreement between the defendant and the United States Attorney's Office. In the alternative, defendant Preslar seeks suppression of any and all evidence disclosed to the Government pursuant to the alleged plea arrangement, on the grounds of "coercion, deceit and fraud" on the part of the United States Attorney. See Rules 12 and 41(f), Fed. R. Crim. P. Finally, in the event that this court finds that defendant Preslar was an agent of the Government and that he acted in accordance with the terms of an express plea agreement, defendant Weichert seeks suppression of any and all evidence obtained as a result thereof in violation of his right to counsel guaranteed under the sixth amendment to the Constitution of the United States. *fn1"

 An evidentiary hearing was held to resolve the factual issues raised by the present motions on February 8 and 11, 1985. After considering the record, the testimony and demeanor of the witnesses, the exhibits, the arguments of the parties and the applicable law, the court hereby denies the defendants' motion to dismiss for impermissible pre-indictment delay. However, based upon the totality of circumstances concerning the conduct of the United States Attorney's Office vis-a-vis defendant Preslar, the court finds that: (1) an express plea agreement existed effective December 1, 1981; (2) that the present indictment is wholly inconsistent with said agreement; and, accordingly, (3) that the only remedy available is dismissal of the present indictment against defendant Preslar. *fn2" This disposition has no effect on the indictment as it relates to defendant Weichert. Additionally, the court finds no factual support for Weichert's claim that his sixth amendment right to counsel was violated and accordingly his motion to suppress is denied.

 I. Pre-indictment delay

 It is well established that a defendant's primary protection against having to face stale criminal charges is the applicable statute of limitations. United States v. Marion, 404 U.S. 307, 322-323, 30 L. Ed. 2d 468, 92 S. Ct. 455 (1971); United States v. Vispi, 545 F.2d 328, 331 (2d Cir. 1976). It is, however, equally well established that the due process clause of the fifth amendment does have a limited role to play in protecting against pre-indictment delay that violates "fundamental conceptions" of justice. See e.g., United States v. Lovasco, 431 U.S. 783, 790, 52 L. Ed. 2d 752, 97 S. Ct. 2044 (1977). Such a due process violation is established only if a defendant is able to demonstrate that the pre-indictment delay caused substantial prejudice to his right to a fair trial and that such delay was the result of improper conduct on the part of the Government. See United States v. Marion, 404 U.S. at 324; United States v. Tanu, 589 F.2d 82, 87 (2d Cir. 1978); United States v. Mejias, 552 F.2d 435, 443 (2d Cir.), cert. denied, 434 U.S. 847, 54 L. Ed. 2d 115, 98 S. Ct. 154 (1977). Moreover, the burden of establishing these necessary elements rests with the defendant; proof of such harm must be definite rather than speculative. United States v. Swacker, 628 F.2d 1250, 1254 (9th Cir. 1980); United States v. Elsbery, 602 F.2d 1054, 1059 (2d Cir.), cert. denied, 444 U.S. 994, 62 L. Ed. 2d 425, 100 S. Ct. 529 (1979).

 In the present case the court concludes that both defendants have failed to establish that this prosecution will violate these fundamental conceptions of justice. The defendants have simply failed to come forward with any evidence tending to show actual prejudice or proof that the pre-indictment delay was an intentional stratagem designed to give the Government a tactical advantage.

 Defendant Preslar, the only witness at the hearing who testified regarding pre-indictment delay, stated that by virtue of almost four years having passed since the occurrence of the acts alleged in the indictment, he has been severely prejudiced in that "his memory has severely faded." He claims that substantial prejudice has been shown because the memories of "material witnesses" who might aid the defense in this case are similarly diminished. The law is clear, however, that a showing that memories have dimmed because of passage of time does not establish substantial prejudice giving rise to a due process violation. See e.g., United States v. Snyder, 668 F.2d 686, 689 (2d Cir. 1982); see also United States v. Ruggiero, 726 F.2d 913, 925 (2d Cir. 1984). Moreover, the defendants' bald assertions regarding diminished memories of potential witnesses are wholly speculative and, thus, fall short of the proof of actual prejudice required by Marion.

 The defendants' claim of actual prejudice resulting from the unavailability of certain "material" witnesses is similarly without foundation. Although defendant Preslar testified in the abstract that some of these potential witnesses might give exculpatory testimony tending to legitimize the allegedly unlawful transactions referred to in the indictment, he failed to offer any specific factual information to substantiate this claim. Additionally, the defendants failed to establish that such information is not otherwise available. Finally, the defendants have also failed to show that these witnesses are in fact "unavailable". Thus, no actual prejudice has been established sufficient to warrant a finding of impermissible pre-indictment delay. United States v. Marion, 404 U.S. at 324.

 Because the defendants have failed to show either actual prejudice to the conduct of their defense, or that the Government intentionally delayed to gain some tactical advantage in the case, the defendants' motion to dismiss on the basis of pre-indictment delay must be denied.

 II. The Alleged Plea Agreement

 A. The Contention of the Parties

 Defendant Preslar claims that the present indictment must be dismissed against him "in the interests of justice" because the Government has breached a prior plea arrangement wherein the defendant agreed to cooperate in an ongoing bankruptcy fraud investigation. In exchange for such cooperation, which included assisting the Government in gathering incriminating evidence against defendant Weichert (and turning over voluminous corporate records), Preslar alleges that the Government promised him that he would be permitted to plead guilty to one count of bankruptcy fraud with a maximum sentence of five years imprisonment. Preslar further alleges that the sentence was to run concurrently with his state court sentence of the same length. Preslar also claims that the Government agreed to secure that his sentence would be served in a Federal, as opposed to a State, correctional facility. *fn3"

 Pursuant to the terms of the plea arrangement defendant contends that he properly turned over to the United States Attorney's Office "all of his books, records and other papers" relative to the ongoing criminal investigation of the target corporations. Preslar further alleges that he disclosed to representatives of the United States Attorney's office and the Federal Bureau of Investigation additional information highly incriminating to himself, defendant Weichert and the target corporations. The defendant claims that he fully complied with the terms of the plea arrangement and that it violates conceptions of fundamental fairness to allow the Government to now renege on its promises. Specifically, the defendant claims that he has already completed serving his extensive state court sentence and he should not now have to face federal charges which, had the Government complied with the terms of the plea agreement, would already have been resolved.

 Throughout this proceeding the Government has contended that either (1) no express plea agreement was ever reached, or (2) the agreement was expressly contingent upon the defendant's full, truthful and complete cooperation. The Government alleges that such cooperation was never fully given by the defendant. Additionally, the Government claims that the documentary evidence surrendered by the defendant constitutes corporate business records which were in no way constitutionally privileged and which could have been ...


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