The opinion of the court was delivered by: SOFAER
On March 5, 1985, this court issued a preliminary opinion on the government's motion to disqualify Gerald L. Shargel. Esq., from representing Richard Mastrangelo at the trial of this criminal action. United States v. Castellano, F. Supp. , No SSS 84 Cr. 63 (S.D.N.Y. 1985) (Shargel II "). that opinion set out the background for the government's motion, and the arguments raised by the government at that time to require Shargel's disqualification.
The government originally advanced three based for disqualifying Shargel: (i) his invocation of the fifth amendment privilege against self-incrimination with respect to his relationships with several of the defendants in this multidefendant case; (ii) the potential conflicts of interest engendered by his prior representation of a number of Mastrangelo's co-defendants; and (iii) the necessity that he appear as a witness. In light of Mastrangelo's sixth amendment interest in retaining the counsel of his choice, see United States v. Cunningham, 672 F.2d 1064, 1070 (2d Cir. 1982), and for other reasons stated in Shargel II, the government's position based on Shargel's mere invocation of the privilege against self-incrimination was rejected. The government made a sufficient demonstration at that time, however, to warrant further proceedings and consideration as to whether Shargel could conceivable face prosecution for perjury or obstruction of justice, and whether his testimony as a witness would be appropriate or necessary. Further inquiry followed, including an in camera which Mr. Shargel and Mr. Mastrangelo attended, at which a cooperating witness (designated "Witness A" in Shargel II) testified and was examined by the court. Also present, at Mr. Shargel's request, was James M. LaRossa, Esq., lead defense counsel if Castellano. The government and Shargel then made additional submissions
The relevant information and testimony has established that the government has no adequate justification for calling Shargel as a witness based on his claimed knowledge concerning particular acts of racketeering or substantive counts. Shargel's testimony before the grand jury indicates that he is unlikely to provide evidence directly helpful to the government. The government, has, however, presented a substantial case for using Shargel's activities and practices as an attorney to help establish the existence of a relationship among several of the defendants suggestive of an organized crime "enterprise" under the Racketeer Influenced and Corrupt Organizations Act (RICO)". 18 U.S.C.§ 1961(4) (1982).
Shargel concedes that if the government is permitted to present this theory to the jury then "obviously I have no place represent[ing] Mr. Mastrangelo." Transcript of Pre-Hearing Conference at 22 (Mar. 1, 1985) ("Conference Tr."). whether Shargel should be called as a witness and should therefore be ordered to withdraw as counsel depends in this case on the relevance and admissibility of the independent evidence concerning his conduct and knowledge. See Cunningham, 672 F.2d at 1074-75. An order was entered on April 1, 1985, disqualifying Shargel, as the record now demonstrates that the testimony concerning Shargel is relevant and admissible; that Shargel's own testimony will be relevant and may be prejudicial to his client; and that the public interest in Shargel's testimony overrides Mastrangelo's right to be represented by the counsel of his own choice.
I. The Relevance and Admissibility of Testimony Concerning Shargel.
At trial the government must prove the existence of the criminal enterprise charged in the indictment, a street "crew" led by the late Roy DeMeo. Indictment [PP] 2-3. this alleged enterprise was an "association in fact," rather than a formal legal entity. to prove its existence, the prosecution must show that it was "an ongoing organization . . . [whose] various associates function[ed] as a continuing unit." United States v. Turkette, 452 U.S. 576, 583, 69 L. Ed. 2d 246, 101 S. Ct. 2524 (1981). Thus, any evidence that tends to show common interests, economic relationships or a hierarchical structure involving the defendants will be relevant to this element of the government's case.
A. Witness A's Testimony.
Witness A, close associate of DeMeo who claims to have been a member of the enterprise, will testify at trial to a meeting, described in Shargel II, at which he watched DeMeo give Shargel a brown paper bag which DeMeo told Witness A contained $100,000 in cash. Witness A testified at the hearing held on this motion that DeMeo also told him the payment was for the legal fees of two other crew members, Gaggi and Dordal:
Q. And did you know the reason you were driving to that location?
Q. And did Mr. DeMeo tell you that?
Q. And what did Mr. DeMeo tell you about the purpose of that drive to that location?
A. that he had to bring him money for Nino's [defendant Anthony Frank Gaggi] case and for Paul's case.
Q. And when you say Paul, you are referring to what individual?
A. Paul Pinto I knew him as [as alias which the government contends was used by defendant Paul Dordal].
Transcript of Evidentiary Hearing at 7-8 (Mar. 7, 1985) ("Hearing Tr."). Witness A also testified that another alleged crew member, Henry Borelli, told him that Shargel demanded high prices, and that Borelli had paid some of Dordal's fees. Id. at 11-12. This testimony about benefactor payments will be corroborated by Witness B, as indicated in Shargel II, F. Supp. at ,slip op. at 12, and may be supported by other evidence. Although Witness A also testified that, in one instance, he was required to sell his car to pay an attorney's fee, Grand Jury Tr. at 242 (Mar. 14, 1984), his testimony suggests that on other occasions (or in the absence of available assets) the crew might pay. His testimony in response to the court's questioning also suggests that Shargel served as an agent of the enterprise in arranging such payments:
Q. When you were at the MCC and you were told that Mr. Hoffman [ostensibly Witness A's attorney. But see infra.] would be paid -- A. Yes.
Q. -- who did you understand would pay the money actually to your lawyer?
Q. Mr. Shargel would pay it out of his own pocket?
A. No, that he was going to take care of it. I don't know who was going to give him the money.
Q. Well, did you understand --
A. The guys were going to give him the money.
Q. You mean the people in the crew?
Q. Was it your brother that was going to give him any money? [This possibility was suggested to the court by Messrs. Shargel and LaRossa.]
A. My brother couldn't even pay attention.
Q. And the $2,000 that was finally paid, do you know where it came from?
Q. You don't know whether it came from your brother or not?
A. No, my brother didn't have a dime.
The jury could conclude that DeMeo's benefactor payments, if in fact they were made, reflected interests other than friendship or a detached concern for the sixth amendment rights of colleagues. The conviction and incarceration of various members of his crew would impair its ability to carry on its operations, and the jury could conclude that he defrayed these legal expenses because they were a cost of doing the business of the crew.
The government also intends to present evidence that DeMeo and other leaders of the crew picked the actual attorneys who represented crew members. See Grand Jury Tr. at 241-43 (Mar. 14, 1984). Witness A explicitly stated that "they" -- meaning DeMeo and other leaders of the crew -- decided which lawyer would represent a crew member in trouble: "You got [to] use the lawyers that they assign to you. This way, if you're doing anything wrong, they would know about it." Id. at 242. By picking a crew member's attorney, in addition to paying him, a crew leader can require him to use an attorney who will supply the leader with information, or seek to keep his nominal client from cooperating, or from otherwise harming the crew's interests. In one instance, Witness A testified, DeMeo arranged a change of attorneys, apparently because the first attorney seemed too ready to enter a plea of guilty on one alleged crew member's behalf to avoid endangering the position of the alleged boss. See if. at 242-43. See also In re Grand Jury Subpoena Served Upon John Doe, Esq, 759 F.2d 968, slip op. at 2859 (2d Cir. 1985) ("John Doe"); id. at 2892 n.9 (Timbers, J., dissenting).
Witness A provided additional details concerning this issue which directly implicate Shargel. He testified that, during his confinement in the MCC in l983, he received an unsolicitied [unsolicited] visit from Shargel, who expressed his condolences to the witness over DeMeo's death. Witness A testified that Shargel said he could not represent the witness because of a conflict, in that Shargel was then representing Gaggi (charged in the indictment as one of the crew's leaders). Shargel allegedly introduced the witness to an attorney, Jeffrey Hoffman, Esq., and told A that Hoffman would be his lawyer. Shargel also allegedly told the witness that he (Shargel) would arrange for the payment of Hoffman's fees, and then proceeded to question A as to whether he was cooperating with the government and to encourage him not to do so. The witness testified:
Q. Can you in as much detail as you can recall, indicate how Mr. Shargel came to see you
A. Yes, Mr. Shargel had -- he told me that he couldn't see me because it was a conflict of interest, so Jeff Hoffman had came and Mr. Shargel, and Mr. Shargel had sent for two other inmates, one fellow's name was Joseph Delveccio and another fellow's name was Mike Donnyboy or Mikeyboy.
Q. And where did this occur, Mr.(A)?
A. In the attorneys' office,in the attorneys' room in MCC New York.
Q. And who was Jeff Hoffman.
A. Jeff Hoffman was supposed to by my attorney.
Q. And are you saying that you met and had a conversation with both of ...