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U.S. v. GOTTI

August 1, 1991

UNITED STATES OF AMERICA, PLAINTIFF,
v.
JOHN GOTTI, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Glasser, District Judge:

MEMORANDUM AND ORDER

The government has moved this court for an order disqualifying Gerald Shargel, Bruce Cutler and John Pollok from representing any of the defendants in this case at trial. The motion is based upon the assertion that there are several actual and numerous potential conflicts of interest to which their continued participation would give rise and that those conflicts can neither be waived nor remedied except by disqualification. The government alleges that the inevitability of their disqualification must follow from the assertions that:

1.  The named attorneys are "house counsel" to the
"enterprise" charged in the indictment, namely, the Gambino
Organized Crime Family, and that their representation of and
services to various members of that enterprise whose
obligations for legal fees were paid by John Gotti will be
"part of the proof of the association-in-fact charged in the
indictment." Their presence at trial will, therefore, violate
DR 5-102(A) of the American Bar Association's Code of
Professional Responsibility.
2.  The named attorneys, and more specifically Shargel and
Cutler, were witnesses to various events of significance that
will be proved at trial also requiring their disqualification
from participating in the trial pursuant to DR 5-102(A).
3.  Shargel and Cutler previously represented their
predecessor as "house counsel," who will be an "important
government witness." Pollok has also previously

represented another prospective government witness. Both
witnesses were represented by one or more of those attorneys
during their testimony before the grand jury in this case.
4.  The insinuation of their own improper conduct could
inhibit their pursuit of a vigorous defense on behalf of their
clients who will thus be deprived of representation by conflict
free counsel.

INTRODUCTION

The superseding indictment contains thirteen counts which will be summarized briefly. The defendants are charged in Count One with violating the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c), unlawfully conducting and participating in the conduct of the affairs of an enterprise through a pattern of racketeering activity. The "enterprise" is alleged to be the Gambino Organized Crime Family of La Cosa Nostra. The predicate acts of racketeering are, as to one or more of the defendants, alleged to be the conspiracy to murder and the murder of Paul Castellano (John Gotti); the murder of Thomas Bilotti (John Gotti); the conspiracy to murder and the murder of Robert DiBernardo (John Gotti and Salvatore Gravano); the conspiracy to murder and the murder of Liborio Milito (John Gotti and Salvatore Gravano); the solicitation of murder of Louis DiBono (Salvatore Gravano); the conspiracy to murder and the murder of Louis DiBono (John Gotti, Frank Locascio and Salvatore Gravano); the conspiracy to murder Gaetano Vastola (John Gotti, Frank Locascio and Salvatore Gravano); illegal gambling business in New York (John Gotti, Frank Locascio and Salvatore Gravano); illegal gambling business in Connecticut (John Gotti, Frank Locascio, Salvatore Gravano and Thomas Gambino); loansharking conspiracy (John Gotti, Frank Locascio, Salvatore Gravano and Thomas Gambino); extortionate collections of credit (John Gotti, Frank Locascio, Salvatore Gravano and Thomas Gambino); obstruction of justice — the Thomas Gambino trial (John Gotti); obstruction of justice — the Castellano murder investigation (John Gotti, Frank Locascio and Salvatore Gravano). In Count Two they are charged with racketeering conspiracy and bribery as a predicate act. Counts Three through Twelve charge the substantive offenses listed in Count One as predicate acts. Count Thirteen charges John Gotti and Frank Locascio with conspiring to defraud the United States in connection with the collection of income taxes.

That indictment was the result of an extensive investigation of the named defendants and of a group of individuals alleged to be associated in fact as the Gambino Organized Crime Family of La Cosa Nostra, characterized in that document as an "enterprise" within the meaning of 18 U.S.C. § 1961(4) and 1959(b)(2). The investigation entailed visual surveillance of many persons and places; gathering, analyzing and appraising the value of information supplied by persons familiar with the targets of the investigation and their activities and electronic surveillance.

The electronic surveillance was conducted pursuant to the authority of orders issued in accordance with 18 U.S.C. § 2510-2521 by Judge Duffy of the United States District Court for the Southern District of New York on September 25, 1989. Those orders authorized the interception of oral communications and visual, non-verbal conduct of John Gotti, Jack D'Amico, Frank Locascio, Salvatore Gravano and others as yet unknown at specified locations in and about the Ravenite Social Club, 247 Mulberry Street, New York, New York and at Scorpio Marketing, 229 West 36th Street, New York, New York. Many conversations were intercepted and recorded. The defendants sought to suppress the fruits of that electronic surveillance, asserting violations of constitutional dimension, the violation of statutes and of common law principles. The briefs, affidavits, transcripts, prior decisions, orders and other assorted documents submitted by each side in support of and against the motion to suppress can fairly be described as voluminous. That motion was denied in a Memorandum and Order issued on July 19, 1991.

The motion to disqualify counsel is predicated to a very large extent upon the electronically intercepted conversations. Pending the resolution of the motion to suppress the interceptions, defense counsel urged the court not "to rush to judgment" on the disqualification motion for the reason, among others, that that motion "should not be decided before it is known whether the Title III surveillance can pass constitutional muster." (Letter from Gerald L. Shargel to the court dated March 5, 1991.) The court acceded to this urging, and having determined that the electronic surveillance does pass constitutional muster, now turns to this motion to disqualify.

STATEMENT OF FACTS

A.  The Attorneys as "House Counsel" for the
    Enterprise

The factual bases upon which the government relies for this and the other grounds for disqualification are excerpts of intercepted conversations, the accuracy of which is not controverted in the defendants' submissions in opposition and which are set out in the Government's Memorandum in Support of its Motion for an Order Disqualifying Counsel ("Gov't Mem.") at 10-52. Those excerpts will be summarized in part and reproduced verbatim in part as is deemed appropriate.

John Gotti described the commencement of his relationship with Gerald Shargel and, after complimenting him on his legal ability, assured him that "our friends will use you." Thereafter, "two guys took him on right away" and "I brought him six." (Gov't Mem. at 10-11.)

At another time Gotti is heard to say to Gravano:

  Some of them love us because we did put them on
  the map. I remember Gerry when Gerry was an
  ambulance chaser.

(Gov't Mem. at 28.)

He also described the commencement of his relationship with Bruce Cutler (Gov't Mem. at 12) who, at the time, was associated with Barry Slotnick:

  Bruce, I don't know him all my life. I know him
  five years. . . . Without us he wouldn't be on the
  map.

(Gov't Mem. at 28.)

In a subsequent conversation between John Gotti, Salvatore Gravano and Frank Locascio, Gotti expressed displeasure at the amounts of money he was paying his lawyers, in these words:

  You know these are "rats" Sam. And I gotta say,
  they all want their money up front. And then you
  get four guys that want sixty-five, seventy-five
  thousand apiece, up front. You're talking about
  three hundred thousand in one month. . . .
  I paid 135,000 for their appeal. For Joe Gallo
  and, and "Joe Piney's" appeal, I paid thousands of
  dollars to Pollok. That was not for me.

(Gov't Mem. at 13.)

  Then I gave him 25,000 for Carneg's. . . .
  Johnny's a wealthy kid, thank God, and he, he
  don't want none of my money. But he refused to
  pay. So there wasn't even no appeal. What, what do
  we do? So, I says, "What do you mean? How much is
  it?" Gerry can tell you. He says, "25." "Well, you
  got it. Pete, bring him 15. And then, you got ten
  in two weeks. . . . The other guy's appealing. I'm
  paying John, I paid his 50.

(Gov't Mem. at 14.)

  I gave youse 300,000 in one year. Youse didn't
  defend me. I wasn't even mentioned in none of
  these * * **fn1 things. I had nothing to do with
  none of these * * * people. . . . What the * * *
  is your beef? . . . Before youse made a court
  appearance, youse got 40,000, 30,000 and 25,000.
  That's without counting John Pollok. . . . You
  standing there in the hallway with me last night,
  and you're plucking me. . . . "Tony Lee's" lawyer
  but you're plucking me. I'm paying for it. . . .
  Where does it end? Gambino Crime Family? This is
  the Shargel, Cutler and who do you call it Crime
  Family.

(Gov't Mem. at 14-15.)

  Don't you know why they ain't got the balls, too?
  I told them yesterday, I told them why. . . . You
  don't get up and holler when you could because
  nothin' you could do. You can't even come to court
  six hours. You write a stay and you're out
  automatically. They got you for six hours, tops,
  they keep you. You don't wanna do it because, you
  * * * you know and I know that they know that
  you're taking the money under the table. Every
  time you take a client, another one of us on,
  you're breaking the law.
  If they wanna really break Bruce Cutler's balls,
  what did he get paid off me. He ain't defending me
  three years ago. I paid tax on 36,000. What could
  I have paid him?
  You, you see me talk for ten minutes in the hall?
  What do we talk about? Nothing. I say "Go find out
  information what's going, when, when the 'pinch'
  is coming, you * * *" "You're making me an 'errand
  boy.'" High-priced errand boy. Bruce, worse yet!

(Gov't Mem. at 16-17.)

The government lists twenty cases *fn2 in which the attorneys represented persons who the government asserts are associated with John Gotti and the Gambino Organized Crime Family.

Michael Coiro and Anthony Gurino will be government witnesses. For a period of approximately twenty years, Coiro represented John Gotti and many of his associates in a variety of criminal cases. He himself was represented by Shargel and Cutler. Pollok previously represented Gurino. As regards the representation of Coiro by Shargel and Cutler, in an affidavit dated January 17, 1991 by Patrick Cotter, an Assistant United States Attorney, the government proffers that Michael Coiro will testify that he never compensated in any way either Shargel or Cutler for representing him in pretrial proceedings, at trial, at sentencing and on appeal in United States v. Ruggiero, et al., 83-CR-412 (E.D.N.Y.), in which Coiro was a defendant. Coiro will testify that when it became apparent that Shargel could not represent him at trial due to a scheduling conflict, Coiro went to Gotti with that problem and was subsequently represented by Cutler at trial. Coiro will also testify that he did not compensate Shargel in any way for representing him in connection with his appearances before the grand jury in this case. Attorney's fees for Gallo, Armone, Carneglia and Guerrieri were paid by Gotti.

There are additional conversations from which the only conclusions to be drawn are that the lawyers represent not merely an individual client, but the enterprise with which that individual is associated and receive instructions calculated to further the interests of that enterprise. One or two excerpts will suffice to demonstrate the point. In a conversation on November 28, 1989, Gotti, unhappy with the content of Jerry Capeci's column in the Daily News, portions of which he attributed to Shargel, was heard to say:

  Gerry came down. I gave him a little blast last
  night. . . . He admits he told him things in the
  past, this Capeci. But he thought he was being
  helpful.
  But . . . we'll give him the benefit of the doubt.
  . . . I told Gerry. Gerry said, "Listen John, you
  know I got one love, you." "Good, all well and
  good. But let me tell you something," I told him
  "you know I ain't got one love," I told him, "you
  know how I feel, ...

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