The opinion of the court was delivered by: Lewis A. Kaplan, District Judge
Defendant Salvatore Scala allegedly is a "capo" and defendant Thomas Sassano a soldier of the Gambino organized crime family. Both are charged in counts 1 and 2 with conspiracy to commit extortion and with the substantive offense. Scala alone is charged in counts 3 through 6 with tax evasion in that he allegedly failed, among other things, to file income tax returns for the years 1998 through 2001.
Virtually on the eve of trial, the government served a Rule 17(c) subpoena on Bruce Barket, Esq., Scala's attorney in this case as well as in a prior prosecution that resulted in Scala's conviction of extortion in the Eastern District of New York. The subpoena calls for production by Mr. Barket of:
"Records showing the source, amounts, and forms in which payment was made for legal, investigative and other fees for services provided in connection with [the Eastern District case], and any related proceedings, excluding any privileged Attorney-Client communications."
Mr. Barket moved to quash the subpoena. The Court denied the motion on June 1, 2006. This opinion sets forth its reasoning.
Proper resolution of the issues presented requires careful consideration of the facts. The present indictment, which added Scala as a defendant to this case, was unsealed on March 29, 2005. The government then was represented by Assistant United States Attorney ("AUSA") Joon Kim. The trial was scheduled for January 9, 2006.
On December 30, 2005, the government informed the Court that the Bureau of Prisons ("BOP") medical staff at the Federal Medical Center at which Scala then was incarcerated pursuant to the Eastern District conviction were unwilling to approve Scala's transfer to this district for trial in consequence of a heart problem, so the trial was adjourned. On March 20, 2006, following further evaluation of Scala's health and ability to travel, it was rescheduled for June 12, 2006.
At some point between March 20 and early May 2006, Mr. Kim evidently left the United States Attorney's Office. He and his colleague, AUSA Christopher Conniff, were replaced by AUSAs Snyder and Kolodner. In reviewing the government's voluminous files, the new AUSAs came across a $750 check written to "cash" by a victim of the alleged extortion ("Victim #2") that bears the note "legal fees" and, on the back, the endorsement of Mr. Barket or his law office.*fn1 This, they say, caused them, probably after May 10, 2006, to re-interview Victim #2, who told the government that Mr. Barket never had represented him and, moreover, that he had made a number of cash payments to Mr. Barket as well.*fn2 This in turn led to a re-interview of Victim #1, who told prosecutors that the amount of the extortion payments demanded of him had gone up in 2001, which coincided with Mr. Barket's representation of Scala in the Eastern District case, because Scala needed to pay legal fees.*fn3
Accordingly, the government on May 17, 2006 applied for and obtained the subpoena at issue here. It claims that the evidence it seeks is relevant on two theories. First, payments to Mr. Barket for the benefit of Scala were or, at least, may have been taxable income to Scala in years in respect of which he filed no tax returns and therefore are relevant to the tax evasion counts.*fn4 Second, it argues that the evidence is relevant to the extortion counts, in substance because it will corroborate the testimony of an extortion victim, who is expected to testify that amounts of the extortion payments increased in 2001 in order to help pay for Scala's defense in the Eastern District case.*fn5
Mr. Barket immediately moved to quash the subpoena, arguing that its enforcement would make him a witness and result in his disqualification as trial counsel for Scala because he is the only person knowledgeable about the records, that it was served too close to trial, that the standard of United States v. Nixon*fn6 was not satisfied, and that enforcement of the subpoena would be unduly burdensome and oppressive.*fn7
The Court heard argument on May 19, 2006, during the course of which Mr. Barket admitted that responsive documents exist and described them as follows:
"There are records of -- the records would be responsive to the subpoena concerning virtually everything, except for the source, with an exception or two; actually, two. The records do not indicate the source of the funds. There were -- so that there are -- and the records would not be self authenticating."*fn8 At the conclusion of the hearing, the Court expressed the preliminary sense that the dispute was premature because production of the documents might result in the government dropping the issue, thus eliminating any issue as to Mr. Barket's possibly testifying and possible disqualification. It granted his request, however, for leave to file an additional brief.
On May 26, 2006, additional papers were filed in support of Mr. Barket's motion to quash. In most respects, they repeated or elaborated upon the previous arguments that the Nixon test had not been satisfied and that enforcement of the subpoena would require disqualification of Mr. Barket in contravention of Scala's Sixth ...