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UNITED STATES v. BERG

September 12, 1986

UNITED STATES OF AMERICA
v.
H. LEONARD BERG, GRIMM DEPANICIS, LEON LISBONA, SOLOMON SCHWARTZ, and HLB SECURITY ELECTRONICS, LTD., Defendants



The opinion of the court was delivered by: PLATT

MEMORANDUM AND ORDER

THOMAS C. PLATT, U. S. D. J.

 This case is before the Court to decide numerous pre-trial motions submitted by the various defendants. Without going into unnecessary detail, the case involves a corporation and a group of individuals who in a 42-page, 14-count indictment are essentially charged with illegally trafficking in firearms and other equipment whose export is restricted by the Arms Export Control Act. Defendants are charged with, inter alia, conducting an enterprise which engaged in racketeering activity in violation of 18 U.S.C. § 1962, the so-called "RICO Act," as well as violations of the Arms Export Control Act, 22 U.S.C. § 2278.

 Defendants Berg, Lisbona, DePanicis and HLB Security Electronics, Ltd. seek discovery, a bill of particulars, the striking of surplusage from the indictment and a ruling permitting defendants to raise at trial the defense of reasonable reliance upon governmental authorization. Defendant Schwartz seeks a severance, dismissal of the indictment, discovery, a bill of particulars, an order suppressing any audio or video recordings, an order "controverting" the search warrant and permission to present the defense of good faith reliance at trial. The Government has moved for an order precluding the introduction of defendants' authorization defense.

 I. The Superseding Indictment

 The lengthy indictment in this case charges defendants with four illegal schemes. One involves the illegal export of 1,300 night vision devices to Argentina during the Falkland Islands War with Great Britain. The second concerns an attempt illegally to export firearms and ammunition to Iraq. The third illegal transaction involves the planned shipment of 400 night vision goggles to the Soviet Union, which included the actual shipment of one sample goggle to West Germany. The fourth scheme involves the attempted shipment of a planeload of arms and ammunition to Poland.

 All of the defendants appear to be involved with one another through various corporate entities engaged in the international arms trade. For the purposes of these motions the Court is primarily concerned with the last illegal transaction, the attempted shipment of arms to Poland via an airplane which was detained by United States Customs authorities at John F. Kennedy Airport on February 28, 1984.

 II. The Defense of Reasonable Reliance Upon Governmental Authorization

 The central thrust of defendants' motions is their application to have the Court permit the introduction at trial of a defense of good faith reliance upon governmental authorization. This proffered defense is directed at the arms shipment intended for Poland. The defendants give various alternative labels for the defense, i.e., entrapment, violation of due process, negation of intent, etc. However, the desired end result is the same: that the Court permit the introduction of evidence of defendant Schwartz's previous communications with intelligence agencies of the United States. To this end, many of defendants' discovery requests seek the acquisition of classified material to be used in support of this defense.

 A. Factual Background and Defense Proffer1

 In response to previous motions directed against the underlying indictment, the Court held a hearing and in addition received the submission of numerous classified documents ex parte, to determine whether there was any basis upon which to permit a defense of governmental authorization in this case. Based on these materials as well as the additional submissions of the parties, the Court can make certain limited factual findings.

 It appears that at least for a period in the 1980's prior to February 2, 1984, defendant Schwartz had a relationship with certain agencies of the United States Government. Schwartz apparently had business communications with officials of the Polish government and on occasion traveled directly to Poland. There came a time when Schwartz met with officials of the Defense Intelligence Agency ("DIA") and the possibility of Schwartz obtaining two Russian model T-72 tanks manufactured in Poland was discussed. The DIA expressed an interest in acquiring the T-72 tanks from Poland and encouraged Schwartz to continue his efforts in that regard. Several meetings between Schwartz and DIA officials were held at which there were discussions concerning the T-72 acquisition effort. *fn2"

 There also were communications between Schwartz and the Federal Bureau of Investigation ("FBI"). These were totally unrelated to the DIA-Schwartz relationship. Schwartz expressed a willingness to provide information to the FBI about Polish Nationals present in the United States who were attempting to obtain United States technology. There were some meetings between Schwartz and an FBI agent engaged in counterintelligence activities but it appears that little came of this "relationship" and it was terminated by the FBI for reasons not relevant to the issues in this case.

 Although it is not entirely clear, defendants' proffer seems to suggest that the attempted illegal export of arms to Poland was somehow tied to Schwartz's "efforts" to acquire the T-72 tanks for the DIA. Defendants have not elaborated on whether the shipment of arms which was seized by the United States Customs Service was meant to be part of a trade for the T-72 tanks, as a bribe to some Polish official, or perhaps just an offering of good faith in furtherance of the negotiations concerning the tank acquisition. To date it has been left for the Court to speculate as to how the attempted export of arms to Poland was designed to facilitate obtaining the tanks.

 The defendants themselves cannot agree on the formulation of their offer of proof. Schwartz's present attorney, George David Rosenbaum, Esq., submitted an affidavit which contains no specific factual allegations at all but rather extremely general, vague, conclusory statements. Rosenbaum states that "this particular defense [good faith reliance on governmental authorization] is unavailable to the co-defendants herein in that upon information and belief, only defendant Solomon Schwartz was privy to and had access to the various governmental officers granting the requisite authorization." Rosenbaum Affidavit at 3. Rosenbaum does not elaborate at all as to the specifics of the "authorization" given to Schwartz. He just broadly proclaims that after viewing the deposition testimony of a government witness, James L. Hetrick, it is clear that "Schwartz was authorized to take the appropriate and necessary actions to obtain the tanks." Rosenbaum Aff. at 10.

 Defendant Berg's attorney, J. Jeffrey Weisenfeld, Esq., makes more specific factual allegations. Weisenfeld asserts that Schwartz advised defendant Berg of the meetings between Schwartz and intelligence officials regarding the acquisition of T-72 tanks and that Berg and the other defendants relied on the statements of Government employees to Schwartz. Weisenfeld Affidavit at 13-14. As to the authorization given to Schwartz, Weisenfeld relates:

 Schwartz was told that the obtaining of the T-72 tanks (which had a new composite alloy armor), was of the highest priority and that the United States had been trying unsuccessfully for years to obtain them. Schwartz was also told that he should do whatever he had to to achieve this result. He was told in a semi-serious manner that he should not kill anyone and that he should not try to trade hi-tech items for the tanks, but that other than these restrictions, he should do what he had to. Schwartz also made it clear at these meetings and conversations, that he would have to violate the law in some regards to get the tanks. He was told that since he was taking these actions on behalf of the United States Government, such acts would not be a violation of law.

 Defendants' Memorandum of Law in Support of Their Motions at 14 (hereinafter "Defendants' Memorandum").

 Mr. Weisenfeld correctly points out that Schwartz is bound by the representations made by Schwartz's prior counsel, in open court, in the presence of Schwartz. See Defendants' Reply Memorandum at 2. In a prior proceeding, in open court, Charles Hayden, Esq., Schwartz's former counsel, stated, among other things, that Schwartz "was given a free hand in how to deal with the Poles to get the tanks and get information," that Schwartz was asked "to do what he could to get tanks," and finally, "his [Schwartz's] entire relationship [to the DIA], not only 'do this,' but 'do something, do something else, find out what they want.' This man was built up, a double O seven, to go over there and do it for your government." Minutes, June 27, 1984, at 27, 74-75.

 Mr. Hayden's statements closely resemble the proffer offered by Mr. Weisenfeld. Given the absence of an affidavit from Schwartz or any other defendant and the lack of any specificity in Mr. Rosenbaum's statements, the Court accepts the proffers offered by ...


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