The opinion of the court was delivered by: Arcara, District Judge.
The defendants, Leonard Falzone and Salvatore "Sammy" Spano,
are charged by indictment with various violations of the
Racketeer Influenced and Corrupt Organizations Act ("RICO"),
18 U.S.C. § 1962(c), (d). Defendant Spano is also charged with
money laundering and conspiracy to launder money in violation
of 18 U.S.C. § 1956, 371, respectively, and three counts of
filing false tax returns in violation of 26 U.S.C. § 7206.
Defendant Falzone is represented in this action by Mr. Harold
Boreanaz, Esq., of the law firm of Boreanaz, Carra and
Boreanaz. Defendant Spano is represented by Mr. Paul J.
Cambria, Jr., Esq., of the law firm of Lipsitz, Green,
Fahringer, Roll, Salisbury and Cambria ("Lipsitz, Green"). The
government has moved to disqualify both Mr. Boreanaz and Mr.
Cambria. The government argues that disqualification is
required because Mr. Boreanaz and Mr. Cambria, either
personally or through their respective firms, had prior
attorney-client relationships with three of the government's
witnesses: Ronald Fino, John "Jack" Fortune and Philip LaRosa.
More specifically, the government alleges that Mr. Cambria had
a prior attorney-client relationship with Fino and that members
of his firm, Lipsitz, Green, had prior attorney-client
relationships with Fortune. The government also argues that Mr.
Cambria should be disqualified because a current member of the
Lipsitz, Green firm, Mr. Joseph B. Mistrett, Esq., was formerly
an Assistant United States Attorney ("AUSA") who assisted
LaRosa with his admission into the Federal Witness Protection
Program. With regard to Mr. Boreanaz, the government alleges
that he had prior attorney-client relationships with both Fino
Both Fino and Fortune have joined in the government's motion
for disqualification. LaRosa, on the other hand, has waived any
attorney-client privilege and has declined to join in the
government's disqualification motion.
Concerning Fino, the defendants have previously argued that
Judge Elfvin's decision in the case of United States v. Joseph
P. Rosato, Cr. 88-66E, 1989 WL 153790, dated December 7, 1989,
denying a similar motion by the government to disqualify both
Mr. Boreanaz and Mr. Cambria based on the anticipated testimony
of Fino as a government witness, should act as collateral
estoppel here. The Court considered this argument separately
and, in a decision dated January 24, 1991 (the "Collateral
Estoppel Decision"), held that Judge Elfvin's decision in
Rosato has preclusive effect in
this case with regard to Mr. Boreanaz. Thus, the Court denied
the government's motion to disqualify Mr. Boreanaz based on the
anticipated testimony of Fino. The Court further found,
however, that Rosato did not have preclusive effect in this
case with regard to Mr. Cambria.
The government has moved the Court to reconsider its Collateral
Estoppel Decision as it relates to Mr. Boreanaz. The
government, however, has failed to present any new facts or
cite any new controlling case law. It simply raises the same
arguments that the Court has already considered and rejected.
Thus, the government's motion for reconsideration of the
Collateral Estoppel Decision is denied.
With regard to the remainder of the disqualification motion,
the parties were given ample opportunity to brief their
respective positions and a hearing was conducted on November
12, 19 and 26, 1990. After considering the testimony of the
witnesses at the hearing, reviewing the exhibits and
submissions of the parties and hearing oral argument from
counsel, the Court grants the joint-motion to disqualify Mr.
Cambria and Lipsitz, Green based on their prior representation
of Ronald Fino and Jack Fortune. The Court denies the
government's motion to disqualify Mr. Boreanaz.
The RICO and RICO conspiracy charges set forth in the
indictment cover a period of time from approximately September,
1985 through August, 1989 during which the defendants are
alleged to have been members of an enterprise that engaged in
the business of collecting unlawful debts, i.e.,
"loansharking." The unlawful nature of the debts stems from the
extremely high interest rates that were charged on the money.
The government asserts that evidence of defendant Spano's
efforts to collect payments from various victims will be
introduced at trial. Among the victims that the government will
call at trial are Philip LaRosa and Jack Fortune. The
government also intends to call Ronald Fino as a witness. The
government asserts that Fino's testimony will deal with the
criminal relationship between Falzone and Spano.
Fino has filed an affidavit dated September 25, 1990, in which
he joins in the government's motion for disqualification.
Fortune, during his testimony at the hearing on November 12,
1990, also joined in the government's motion. LaRosa, on the
other hand, has declined to join in the government's motion and
has waived any attorney-client privilege he may have had with
Mr. Boreanaz or Mr. Mistrett.
Mr. Boreanaz has been defendant Falzone's attorney for about 30
years. Mr. Cambria, on the other hand, was retained by Spano
specifically for defense of the pending criminal charges. There
was no attorney-client relationship between Mr. Cambria and
Spano prior to this case. Both Falzone and Spano have made
informed waivers of their rights to conflict-free counsel.
From 1973 through 1988, Ronald Fino was the business manager
for Buffalo Laborers Local 210 (the "Union"). During his tenure
as business manager, the Union was represented by the Lipsitz,
Green law firm. Fino consulted with Mr. Cambria and various
other members of Lipsitz, Green regarding Union business on a
regular basis throughout this period. Mr. Cambria also
represented Fino during this period in several personal,
non-Union civil and criminal matters.
In 1977, Fino retained Mr. Cambria for the purpose of
collecting monies owed to Sno-Go, a company with which Fino was
associated. The company was allegedly owed monies by the City
of Buffalo for snow removal services.
In 1979, Fino retained Mr. Cambria to represent him with regard
to a grand jury investigation of Onyx Corporation, a minority
business enterprise with which Fino was associated. On November
19, 1981, as a result of this investigation, Fino, along with
three other individuals, was indicted for a variety of crimes,
including conspiracy, mail fraud, making false statements,
obtaining false bank loans and obstruction of justice. The case
went to trial and, on September 28, 1983, a mistrial was
declared. The case was retried and, on March 27, 1985, another
mistrial was declared. On November 19, 1985, Fino entered a
plea of guilty to a misdemeanor conspiracy charge. During this
entire period, from the initial investigation in 1979 until the
final plea in November, 1985 and the subsequent sentencing,
Fino was represented by Mr. Cambria.
Fino testified at the hearing that, in 1980, Mr. Cambria also
represented him on a speeding ticket he received in Watertown,
New York. Further, Fino discussed problems that he had with the
Internal Revenue Service with Mr. Cambria. With regard to this
tax matter, however, he was subsequently represented by another
attorney in the Lipsitz, Green firm.
In 1982, Fino sought Mr. Cambria's representation with regard
to injuries he suffered from a fire occurring in the MGM Grand
Hotel in Las Vegas, Nevada. Mr. Cambria referred Fino to an
attorney in Las Vegas, Nevada.
Fino was also called as a witness before a federal grand jury
in the Western District of New York in the case of United
States v. John R. Catanzaro, Cr. 88-67. He was represented by
Mr. Cambria on this matter. Fino appeared before the grand jury
but asserted his Fifth Amendment right not to testify.
During Fino's tenure as the Union's business manager, from 1973
to 1988, he was also serving as an informant for the FBI. He
provided the FBI with information concerning Union activities
and other criminal matters. Some of this information came from
conversations that Fino had with Mr. Cambria and Mr. Boreanaz.
It is noted that a similar motion to disqualify Mr. Boreanaz
and Mr. Cambria, based on their prior representation of Fino,
was made by the government on behalf of Fino as a prospective
witness in the case of United States v. Rosato, Cr. 88-66E.
As stated earlier, Judge Elfvin denied the government's motion
in a Memorandum and Order dated December 7, 1989.
Furthermore, a motion citing similar grounds was made before
this Court in the case of United States v. John R. Catanzaro,
Cr. 88-67A. The Court conducted an extensive hearing on the
issue in March, 1989 and became very familiar with the facts
relevant to the government's motion. However, the Cantanzaro
case was transferred to Judge Curtin and resolved by plea
without the disqualification motion having been decided.
Finally, another motion to disqualify Mr. Cambria, based on his
prior representation of Fino, was made before Judge McAvoy of
the Northern District of New York in the case of United States
v. Pavlisak, et al., Cr. 89-194, 1990 WL 208705. Judge McAvoy
denied the motion in an Order dated December 7, 1990.
In late 1986, Jack Fortune retained Mr. Herbert L. Greenman,
Esq., in connection with an investigation by the New York State
Attorney General's Office relating to Fortune's alleged
involvement in a "pyramid sales" scheme known as the "airplane
game." Mr. Greenman is a partner of the Lipsitz, Green firm and
was associated with the firm during the period he was
representing Fortune. Up until 1988, Mr. Greenman, along with
Mr. Mark Hoskins, Esq. and Mr. John Murrett, Esq., both of whom
were also associated with Lipsitz, Green, continued to
represent Fortune in a number of other criminal matters
including theft of services involving National Fuel Gas Company
and bad check charges. These criminal charges arose from cash
flow problems that Fortune was encountering as the operator of
the Three Coins Restaurant in Amherst, New York. The victims of
the bad checks were suppliers of the restaurant.
During late 1987 and 1988, Fortune was approached by agents of
the Federal Bureau of Investigation ("FBI") concerning the
activities of Spano. He then agreed to testify before the grand
jury in connection with this case and freely discussed the
Spano investigation with Mr. Greenman.
Mr. Greenman testified that the files concerning Fortune were
kept in or near his office with the rest of his case files.
While these files were physically separate from other Lipsitz,
Green office files, the cabinets in which they were kept were
not locked, were physically accessible to any member of the
firm and were part of the firm's central billing system.
Fortune's legal fees went to the Lipsitz, Green firm and were
shared by all members of the firm, including Mr. Cambria. Mr.
Cambria was, and is, the senior partner and supervising
attorney for the firm's criminal department and Mr. Greenman's
immediate supervisor. Mr. Cambria had unlimited access to all
billing information concerning Fortune, including specifics as
to services performed and fees charged, as well as physical
access to the Fortune files.
Both Mr. Greenman and Mr. Hoskins testified that they had never
discussed any of Fortune's cases with Mr. Cambria. Mr. Murrett,
in an affidavit dated October 10, 1990, stated that he never
discussed his representation of Fortune with Mr. Cambria. Mr.
Cambria testified that he never received any information
regarding Fortune as a result of the firm's representation of
Philip LaRosa was first represented by Mr. Boreanaz starting in
1964. At that time, Mr. Boreanaz represented LaRosa in
connection with a construction accident in which LaRosa was
injured. After nearly a decade of representation on that
matter, it was finally settled.
In 1982, LaRosa was indicted in the Western District of New
York for possessing a quantity of counterfeit money. He was
represented on those charges by Mr. Patrick J. Baker, Esq. who
was a partner in Mr. Boreanaz's law firm. In 1983, LaRosa
pleaded guilty to a misdemeanor in satisfaction of the
counterfeiting charges and was placed on probation. Mr.
Boreanaz's firm also represented LaRosa in the sale of his
personal residence in 1985.
On or about June, 1989, LaRosa sought admission to the Federal
Witness Protection Program on the basis of cooperation that he
provided to the government over the previous six years. Mr.
Mistrett, who is currently associated with the Lipsitz, Green
firm, was the AUSA in charge of assisting LaRosa in entering
the Program and met with LaRosa on three different occasions ...