Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

UNITED STATES v. CASTELBUONO

September 10, 1986

UNITED STATES OF AMERICA,
v.
ANTHONY C. CASTELBUONO, Defendant



The opinion of the court was delivered by: PLATT

MEMORANDUM AND ORDER

PLATT, D.J.

 This case is before the Court for the purpose of deciding the pretrial motions of defendant Anthony C. Castelbuono. Castelbuono is a co-defendant of Victoriano Molina-Chacon and others who were involved in a heroin importation and money laundering conspiracy of huge proportions. Previous decisions of this Court regarding Castelbuono's co-defendants can be found at 625 F. Supp. 338 and 627 F. Supp. 1253. Upon the joint request of Castelbuono and the Government, the Court granted Castelbuono a severance from his co-defendants. The Court also granted Castelbuono's additional request to delay the start of his trial for a substantial and indefinite period of time, based on (i) the Court's finding that the case was a "complex" one within the meaning of Section 3161(h)8(B)(ii) of the Speedy Trial Act; (ii) the fact that Castelbuono's lawyer was (and indeed still is) involved in the protracted so-called "Pizza Connection" case in the Southern District of New York; and (iii) Castelbuono's waiver, under oath, in writing and orally in open Court of his right under such Act to move to dismiss for failure of this Court and the Government to give him a speedy trial as well as all of his other rights under such Act. After a lengthy trial of the co-defendants, Victoriano Molina-Chacon, Rudolfo Risatti, Francis DiTommaso and Sheila Silvetti were convicted of various charges related to the heroin and money laundering activities. Defendant Salvatore Messina was acquitted of all charges.

 In the present motion Castelbuono seeks the dismissal of the indictment against him or, in the alternative, the suppression of any statements he made as well as any evidence derived directly or indirectly from his statements. The basis of this motion stems from a "limited" cooperation agreement executed by Castelbuono and the Government on November 21, 1983. Pursuant to Kastigar v. United States, 406 U.S. 441, 32 L. Ed. 2d 212, 92 S. Ct. 1653 (1972), the Court held lengthy hearings to determine whether the Government had an independent source for evidence to be used against Castelbuono at trial. In their post-hearing briefs the parties have expressly reserved the issue of whether the Government's evidence is "tainted" by Castelbuono's "cooperation." The sole issue before the Court is whether Castelbuono breached the agreement, thereby forfeiting any immunity protection it provided.

 I. Factual Background

 Defendant Castelbuono is a graduate [Footnote 1] of the Harvard Law School and prior to his current legal troubles practiced law in New York State and also owned several businesses. Whatever Castelbuono's financial success in these endeavors, it apparently was not sufficient for him because he became involved with an international network responsible for the importation of millions of dollars worth of heroin into the United States. In a nutshell, Castelbuono was the mastermind of the money laundering operations of a group of multi-national heroin dealers. Typically, Castelbuono would take delivery of huge amounts of cash that were the small bills proceeds of heroin sales. He then would enlist the assistance of his employees and relatives in transporting the cash to Atlantic City where, after a period of gambling, the small bills would be converted to hundred dollar bills for easier transport. The larger bills would then be transported to the Bahamas or Bermuda and from these locales physically carried to the secret Swiss bank accounts of the heroin ring. The details of some of these transactions will be discussed later in this decision.

 FOOTNOTE 1 NOT IN ORIGINAL.

 Antonio Turano was the Italian heroin importer who originally enlisted Castelbuono's assistance in laundering the heroin proceeds. The organization, of which Turano was a member, utilized shoe importing companies as a cover for their heroin trade. On October 17, 1982, Turano was arrested by agents of the Drug Enforcement Administration ("DEA") for his role in a 15-kilogram heroin transaction. On October 28, 1982, Italian authorities began installing wiretaps on telephones utilized by Gaetano Giuffrida, Turano's partner in heroin trafficking. These wiretaps yielded huge amounts of incriminating evidence against members of the network and Castelbuono's name arose a number of times in connection with his money laundering activities. On January 21, 1983, Italian authorities seized 80 kilograms of heroin destined for one of the organization's shoe company fronts. At the time, this was one of the largest seizures Italian authorities had ever made and it received some press coverage, as did Turano's initial arrest.

 After the above events, Castelbuono was no doubt concerned that the authorities were closing in on him. Through an acquaintance, Castelbuono arranged a meeting with DEA Agent Ronald Brogan in the hope of offering his cooperation to the Government. Supposedly concerned for his safety, Castelbuono insisted upon the secrecy of his identity and agreed only to meet with Agent Brogan. During two meetings with Agent Brogan held on February 18 and March 4, 1983, Castelbuono related some details of his money laundering activities for the heroin organization. No representations of immunity were made to Castelbuono at either meeting and it is the position of the Government that apart from any issue related to Castelbuono's later "cooperation," his voluntary statements to Agent Brogan are admissible against him. At their second meeting, Agent Brogan told Castelbuono of the recent murder of Turano, whose body had been discovered on March 3, 1983. This information visibly upset Castelbuono.

 In early May of 1983 Castelbuono, along with his attorney, Ivan S. Fisher, Esq., met with Assistant United States Attorneys ("AUSAs") Mark Summers and Gavin Scotti of the Eastern District of New York to discuss the possibility of Castelbuono's cooperation. At that meeting, supposedly out of fear for his personal safety and his alleged belief in his innocence of any crime, Castelbuono suggested such stringent conditions on his cooperation and offered such dramatic departures from the usual cooperation terms that the AUSAs felt his offer was of little value. Later, the AUSAs informed Mr. Fisher that they were not interested in Castelbuono's cooperation. Minutes of Hearing at 134.

 Mr. Fisher made repeated attempts to interest the Government in Castelbuono's cooperation. Finally, on November 21, 1983, a limited cooperation agreement was signed. (A copy of that agreement is attached as an appendix to this opinion.)

 Castelbuono's subsequent relationship with the DEA case agents handling the investigation of the heroin ring was strained, to put it mildly. Throughout the relationship, the agents believed Castelbuono's cooperation was half-hearted at best and quite possibly merely a ruse on his part to gain knowledge of the Government's information. Throughout the hearings it was apparent that Castelbuono's "cooperation" consisted of revealing misleading, incomplete tidbits of information and withholding documents, tapes and other information from the Governnent. Throughout this period, and in the briefs submitted in support of his motion, Castelbuono justifies his recalcitrance on the basis of alleged fears for his personal safety.

 In an effort to alleviate Castelbuono's fears and to facilitate more complete cooperation the Government entered into a supplemental oral agreement on February 20, 1984, in which Castelbuono was given veto power over the proposed use of any information which might reveal his identity as an informant. This supplemental agreement did not improve matters. The very next day, exasperated agents rescinded the cooperation agreement after Castelbuono again declined to cooperate fully. The agents thereafter gave Castelbuono another chance to prove the bona fides of his cooperation but Castelbuono was, as usual, unsuccessful in fully recording a conversation with a co-conspirator.

 Throughout the latter part of 1984 Castelbuono's relationship with the Government consisted of one of the case agents trying to repossess recording equipment loaned to Castelbuono and Castelbuono trying to entice the agents back into a relationship by revealing selected snippets of information. On March 7, 1985, agents executed search warrants on Castelbuono's residences and arrested him in Utah.

 Castelbuono advances two arguments in support of his motions: (1) that he satisfied the terms of the agreement, and (2) that even if he acted in bad faith, United States v. Kurzer, 534 F.2d 511 (2d Cir. 1976), prevents loss of immunity.

 II The Application of United States v. Kurzer

 Castelbuono argues that United States v. Kurzer prevents the loss of immunity granted by the cooperation agreement due to any bad faith on Castelbuono's part in fulfilling his end of the bargain. Specifically, the Court in Kurzer mentioned in dictum:

 [T]he ordinary remedy for the Government when an immunized witness lies or fails to cooperate fully is a prosecution for perjury or for contempt, rather than abrogation of the immunity agreement and use of the information truthfully given by the immunized witness to prosecute him for other offenses.

 Kurzer at 518.

 The holding in Kurzer is clearly distinguishable from this case. The witness/defendant in Kurzer had been granted immunity pursuant to 18 U.S.C. § 6003 and was compelled to testify before a grand jury. By statute, Congress has forbidden the use of testimony immunized pursuant to 18 U.S.C. § 6003 in any prosecution except one for perjury, giving a false statement or failure to comply with the court order to testify. See 18 U.S.C. § 6002. The concern here is to insure that the protection afforded to the defendant is co-equal with the Fifth Amendment right against self-incrimination that the defendant is compelled to waive.

 By contrast, the present case concerns a defendant who voluntarily sought out the Government with a proposition of cooperation. The resulting agreement was the result of extensive negotiations between defendant and the AUSA. See Defendant's Brief in Support of Motion to Dismiss the Indictment and Suppress Evidence at 20 (hereinafter "Defendant's Brief"). There is no question of compulsion here. Rather, whatever immunity is conferred is governed by the terms of the agreement reached between the parties. In United States v. Irvine, 756 F.2d 708 (9th Cir. 1985), the Court dealt with virtually the same argument advanced by Castelbuono and rejected it, noting:

 There is no issue of compelled self-incrimination in this case. Irvine was not required to testify. He testified pursuant to an agreement entered into freely on his own initiative and for his own purposes. Irvine was free to agree to conditions that could not have been imposed upon him had he chosen to claim his Fifth Amendment privilege.

 Irvine at 712. Kurzer 's interpretation of statutory immunity is not applicable to the case at bar.

 Under paragraph 2 of the November 21st agreement the Government reserves the right to use any of Castelbuono's statements should he commit any crime subsequent to the date of his cooperation under the agreement. Similarly, under paragraph 3 of the agreement, if it was ever determined that Castelbuono made a statement which was "false in any material respect" the agreement would be null and void and the Government could use Castelbuono's statements or any evidence derived therefrom.

 Clearly, by the terms of the agreement, if Castelbuono made any false material statements he would forfeit whatever immunity he had. Castelbuono may not now escape the terms of the agreement he freely bargained for by relying on the irrelevant dictum of Kurzer. See United States v. Stirling, 571 F.2d 708, 730-32 (2d Cir.), cert. denied, 439 U.S. 824, 58 L. Ed. 2d 116, 99 S. Ct. 93 (1978) (defendant's failure to fulfill terms of plea agreement allowed Government to use grand jury testimony in later prosecution); United States v. Pellon, 475 F. Supp. 467 (S.D.N.Y. 1979), aff'd, 620 F.2d 286 (2d Cir. 1980) (non-prosecution agreement not a grant of full immunity, Kurzer does not apply, defendants got what they bargained for).

 Thus, if the Court finds that Castelbuono made a statement that was false in any material respect it is clear that he has forfeited any immunity conferred upon him by the agreement and the Government is not limited to a prosecution for perjury or false statement. The Government also argues that Castelbuono breached the November 21st agreement by his overall lack of good faith in fulfilling his obligations under it. Castelbuono argues that without an explicit provision in the agreement imposing a loss of immunity for a lack of good faith, Kurzer must apply.

 Castelbuono's argument is incorrect. As the Court has clearly demonstrated, Kurzer involved only statutorily imposed immunity, granted through compulsion. When a defendant acquires immunity via an agreement, as here, the remedies of the parties are governed by that agreement. Here, Castelbuono was clearly put on notice by paragraph 3 of the November 21st agreement that a violation of its terms would result in the loss of immunity. A cooperation agreement such as the one signed here is a contract governed by the relevant principles of contract law. See Irvine, supra, at 710. If the Court should find that even though the defendant did not make false statements he still breached the agreement through his bad faith, the Court must then look to the terms of the contract for the appropriate remedy the parties intended in case of breach. It is clear from the terms of the agreement that ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.