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BERNSTEIN v. IDT CORP.

June 27, 1986

LAWSON F. BERNSTEIN, TRUSTEE IN BANKRUPTCY OF FRIGITEMP CORPORATION, Plaintiff,
v.
IDT CORPORATION, GEORGE DAVIS, GENERAL DYNAMICS CORPORATION, PANAGIOTIS TAKIS VELIOTIS, JAMES H. GILLILAND, PAULETTE VELIOTIS, ELIZABETH GILLILAND, LENORA L. CABLE, a/k/a LENORA DAVIS, MARK J. DEROCHE and JOHN DOE DEFENDANTS whose identities are currently unknown to plaintiff, Defendants, GERALD E. LEE, Additional Defendant on the Counterclaims



The opinion of the court was delivered by: WEINFELD

EDWARD WEINFELD, D.J.

 Plaintiff, the trustee in bankruptcy of the Frigitemp Corporation ("the Trustee"), moves for the entry of findings of fact as against defendant George Davis based upon collateral estoppel by reason of his prior criminal conviction in United States v. Davis.1 The majority of plaintiff's proposed findings of fact have been stipulated by Davis; the Court now disposes of the remaining items in dispute. In addition, the Trustee moves for the establishment of the authenticity of certain Swiss banking records and other documents admitted into evidence at Davis's criminal trial.

 COLLATERAL ESTOPPEL

 (a) This civil action.

 The Trustee's complaint charges George Davis and others, including General Dynamics Corporation and the IDT Corporation, engaged in a conspiracy and pattern of racketeering activity to extort multi-million dollar kickbacks from Frigitemp Corporation by making payments to officials of named defendant corporations in return for the approval of subcontracts awarded to Frigitemp. The complaint alleges that as the result of payments of further bribes, defendants fraudulently transferred the subcontracts from Frigitemp to defendant IDT Corporation, a new company established and controlled by Davis and other former Frigitemp employees. These transactions, the complaint alleges, were concealed from the Trustee by a pattern of bankruptcy fraud, including perjurious statements made at depositions conducted by the Trustee pursuant to the Bankruptcy Rules and in furtherance of a conspiracy to obtain a settlement and release by the plaintiff Trustee of certain defendants and approval of the settlement and release by the Bankruptcy Court.

 (b) The criminal prosecution.

 The indictment upon which Davis was convicted charged Davis and three codefendants with conspiracy to defraud and conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act ("RICO"), and the commission of alleged predicate offenses of mail and wire fraud, interstate transportation of stolen property, and bankruptcy fraud in connection with the same transactions. The civil complaint parallels many of the allegations in the indictment and the facts which the Trustee seeks to establish as against Davis by collateral estoppel set forth the underlying scheme to bribe employees of General Dynamics, including the mechanism of the scheme, and the diversion by Davis of substantial sums into his own hands.

 Under the concept of collateral estoppel the Trustee seeks to preclude Davis from denying, in this civil litigation, issues of fact which the Trustee contends were established in the prior criminal prosecution against Davis to which the Trustee obviously was not a party. As the Supreme Court has noted, it is a settled principle that under collateral estoppel, "once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to the prior litigation." *fn2"

 The Supreme Court has further noted, "in the case of a criminal conviction based on a jury verdict of guilty, issues which were essential to the verdict must be regarded as having been determined by the judgment." *fn3" Accordingly, with respect to each of the Trustee's proposed findings, his burden is to show that the facts asserted were necessarily found by the jury which convicted Davis. It is of course true that "[a] general verdict of the jury . . . without special findings does not indicate" which of the factual contentions alleged in the indictment or contained in the trial record were determined by the jury or the fact finder; "under these circumstances what was decided by the criminal judgment must be determined . . . upon an examination of the record, including the pleadings, the evidence submitted, the instructions under which the jury arrived at its verdict, and any opinions of the courts." *fn4"

 In accordance with the teaching of the Emich case, the Court has reviewed the indictment in United States v. George G. Davis et al., the opinion of our Court of Appeals affirming the conviction, the instructions to the jury and relevant portions of the trial record and the briefs submitted by the parties. *fn5" On the basis of its study of these materials, the Court resolves the parties' Disputed Findings of Fact as indicated by either "sustained or overruled" in the margin of instant application for collateral estoppel. Those rulings shall be deemed the Court's order on this branch of the plaintiff Trustee's application.

 AUTHENTICITY OF DOCUMENTS

 The Trustee also moves for an order that (a) certain Swiss bank records, produced by the Swiss Government pursuant to the Treaty between the United States and Switzerland on Mutual Assistance in Criminal Matters *fn6" and admitted into evidence at the criminal trial of George Davis are authentic business records as defined in Fed. R. Evid. 803(6) and 901; (b) that all other documents admitted into evidence in Davis's trial are authentic business records meeting the criteria of the referred to Rules in the absence of specific objection by any defendant within twenty days.

 The Federal Rules of Civil Procedure establish a mechanism for the efficient authentication of documents during the process of discovery. Rule 36 provides that:

 
A party may serve upon any other party a written request for the admission, for purposes of the pending action only, of the truth of any matters . . . set forth in the request that relate to statements or opinions of fact or of the application of law to fact, including the genuineness of any documents described in the request. Copies of documents shall be served with the request unless they have been or are otherwise furnished or made available for inspection and copying. A party who considers that a matter of which an admission has been requested presents a genuine issue for trial may not, on that ...

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