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July 27, 1993

PAUL W. MOZER, Defendant.


The opinion of the court was delivered by: PIERRE N. LEVAL


 This is a motion by the defendant in a criminal case seeking specific performance of a plea agreement he made with the United States Attorney's Office for the Southern District of New York. Specifically, he seeks to be allowed to plead guilty in accordance with the terms of the agreement and to receive its benefits. The Government opposes the motion.


 Defendant Paul Mozer was a managing director of Salomon Brothers Inc., a New York investment bank, and was the head of Salomon's Government Trading Desk. As a primary dealer in U.S. Treasury securities, Salomon regularly purchased such securities in the Treasury's auctions. Under Treasury rules, one entity may purchase no more than 35% of the total amount of securities offered in an auction, and may bid for no more than 35% of the amount at auction at any one yield level.

 In the fall of 1992, the Department of Justice, at the instance of the Treasury Department, was investigating whether Salomon had violated these Treasury rules in a February 1991 auction by submitting multiple 35% bids in dummy names and thus, after proration of the bids, receiving aggregate allocations that exceeded the maximum of 35% allowed. Separate investigations were being conducted by the Office of the United States Attorney for the Southern District of New York ("SDNY") and the Antitrust Division of the Department of Justice. It appears that Mozer cooperated with SDNY's investigation and negotiated for a plea agreement.

 On November 19, 1992, after his cooperation and following extensive negotiations, Mozer entered into a plea agreement with the SDNY Office (the "Agreement"). The Agreement provided that the SDNY Office "will accept" a guilty plea from Moser, entered "no later than December 3, 1992," to an information charging him with two counts of "making, and aiding and abetting the making of, false statements within the jurisdiction of an agency of the United States," in violation of in U.S.C. §§ 1001 and 2; and that in return for such plea, he would not be further prosecuted by SDNY for any crimes he committed related to his participation in Treasury auctions during a specified period. It went on to specify certain agreements as to application of the Sentencing Guidelines and to provide that the Government would move under § 5K1.1 of the Guidelines for a downward departure in Mozer's sentence by reason of the defendant's prior cooperation. The Agreement also emphasized in customary language that the undertaking that Mozer would not be prosecuted further bound only the SDNY office and did not bind "other federal, state or local prosecuting authorities." It then added an unusual provision, as follows:

The parties understand that Paul Mozer intends to claim that certain other prosecuting authorities are barred from further prosecuting him for conduct relating to U.S. Treasury securities by alleged prior agreements between Paul Mozer and such authorities. Although the Office believes that such a claim is without merit, the parties agree that nothing in this Agreement should be construed so as to prevent Paul Mozer from raising such a claim in any future proceedings brought by such other prosecuting authorities.

  The Agreement also included a conventional integration clause. *fn2" Nothing in the plea agreement addressed the specific form or content of the information to which Mozer would plead.

 On December 3, 1992, the last day provided for Mozer to enter his plea under the Agreement, the parties signed an amending letter, extending the Agreement "to provide that Paul W. Mozer will enter . . . guilty pleas on or before January 7, 1993."

 Sometime in the weeks after that letter was signed, disputes arose between the SDNY Office and Mozer. On January 5, 1993, when Mozer's counsel, Stanley Arkin, Esq., first saw SDNY's draft of the information to be filed against Mozer, he objected to certain language in the draft. His objection had two prongs, as follows. Section 1001 of Title 18 covers three categories of conduct: (1) falsification, concealment, and covering up by any trick, scheme, or device; (2) making a false or fraudulent statement; and (3) making or using a false writing. The information as drafted charged Mozer with all three theories. The plea agreement referred to only one of the three -- "making . . . false statements." Arkin contended that the information charging all three theories of § 1001 violated the agreement that he would plead to an information "charging him . . . with making . . . false statements . . . in violation of . . . Section 1001 . . . ." Second, Arkin protested the inclusion in the information of narrative language asserting that Mozer had attempted to cover up Salomon's false bids after the February 1991 Treasury auction. The SDNY Office refused to remove this language from the information, or to limit its charges to the false statements branch of § 1001.

 On the evening of January 6, 1993, with Mozer's arraignment on the two-count information scheduled for the next day, Mozer's attorneys telecopied to the SDNY Office copies of Mozer's draft Motion for Expedition and Motion to Strike and for Specific Performance, with supporting affidavit and memorandum of law. The motion for specific performance contended that the information drafted by SDNY was not consistent with the Agreement; it sought to enforce the terms of the Agreement. The accompanying letter stated that, "Mr. Mozer stands ready and willing to perform his obligations under the Plea Agreement."

 On January 7, 1993, the SDNY Office filed the two-count information including the language to which Arkin had objected. Mozer was arraigned before a magistrate judge and waived his right to prosecution by indictment. The case was assigned to Judge Robert P. Patterson. At this time, representatives of the SDNY Office apparently told Mozer's counsel that if Mozer did not wish to plead to the information as filed, the Office would treat this as his repudiation of the Agreement and would proceed to present an ...

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