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United States v. Espinal

United States District Court, S.D. New York

March 10, 2015


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For the Southern District of New York: Margaret M. Garnett, Esq., Laurie A. Korenbaum, Esq., Harris M. Fischman, Esq., Assistant United States Attorneys, PREET BFIARARA, Esq., New York, New York.

For Jose Espinal, Defendant: Robert C. Gottlieb, Esq., Celia A. Gordon, Esq, Justin F. Heinrich, Esq., Ravi Kantha, Esq., GOTTLIEB & GORDON LLP, New York, New York.


DENNY CHIN, United States Circuit Judge.

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In this case, defendant Jose Espinal moves in the interest of justice to dismiss the indictment against him for prosecutorial misconduct. In particular, he alleges that the government violated his rights under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), and Massiah v. United States, 377 U.S. 201, 84 S.Ct. 1199, 12 L.Ed.2d 246 (1964). He also contends that the government made misrepresentations in wiretap and search warrant applications and in presentations to the grand

While I conclude that the government did engage in a pattern of troubling and overly aggressive conduct in this case, for the reasons set forth below, Espinal's motion to dismiss is DENIED. The following

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constitute my findings of fact and conclusions of law.[1]


A. Background

1. The Enterprise

The government alleges that Manuel Geovanny Rodriguez-Perez (" Rodriguez" ) and more than fifty co-defendants participated in a substantial criminal enterprise (the " Enterprise" ) that engaged in narcotics trafficking, acts of violence (including murders and attempted murders), money laundering, illegal money transmitting, and bank fraud, from the mid-1990s through 2013, primarily in the Washington Heights and Inwood neighborhoods of Upper Manhattan. (Gov't Exs. C at ¶ ¶ 1-3, D at 5, 12, Z at ¶ ¶ 1-4,). Indeed, the government alleges that the Enterprise committed ten murders from 1997 through 2006. (Gov't Ex. Z at 12-31).

2. Espinal's Alleged Participation

In the S31 Indictment, which is the operative indictment, the government charges that Espinal participated in and associated with the Enterprise. (Gov't Ex. D at 8; see Dkt. No. 879). Count One charges Espinal and others with racketeering and alleges seventeen racketeering acts, including narcotics trafficking, murder, and money laundering. (Gov't Ex. D at 9). Count Two charges Espinal and others with conspiracy to commit racketeering. (Id. at 10). Count Twenty-Eight charges Espinal with participating in a money laundering conspiracy from 2009 through 2011. (Id.). The government contends that, beginning in 2009, Espinal played a " key role" in laundering the Enterprise's proceeds from its narcotics sales. (Id. at 13). Espinal purportedly accepted large amounts of cash from members of the Enterprise and then, concealing the source of the cash, made investments in real estate, including a tract of land in upstate New York. (Id.). Espinal allegedly masked Rodriguez's involvement by making it appear as though other individuals were the sources of the funds. (Id.). Espinal and Rodriguez purportedly tunneled cash through intermediaries, who wrote checks to make it seem as if they were investing in real estate controlled by Rodriguez and Espinal. (Id. at 13-14). Counts Thirty-Four and Thirty-Five allege that Espinal engaged in obstruction of justice in 2010 by asking a lay witness to prepare false receipts that understated the amounts of cash Rodriguez and Espinal had paid him for hunting trips and taxidermy work. (Id. at 15-16). In addition, Counts Thirty-Seven and Thirty-Eight allege that in the fall of 2011, Espinal engaged in obstruction of justice by creating false documents that suggested that certain checks he received from intermediaries were " loans." (Id. at 16).

B. The Government's Investigation

In February 2009, the government intercepted certain telephone calls that eventually led to Rodriguez. (See Gov't Ex. B at 3-18). Two brothers were intercepted discussing the need to pay money to " Shorty" for marijuana they had purchased from him. Shorty was later identified as Rodriguez. (Id. at 1, 5). Agents arranged for surveillance of a planned cash handoff between one of the brothers and Shorty. When Shorty drove away from the meeting, agents stopped his vehicle, identified him as Rodriguez, and found $25,000 in cash. (Id. at 5-6). After Rodriguez told the agents that the money was from a restaurant, the agents seized the money and allowed Rodriguez to drive away. (Id.

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at 6; Def. Ex. HH ¶ 28). Approximately twenty minutes after the stop, Rodriguez made two unsuccessful telephone calls to Espinal. Fifteen minutes later, Espinal returned the call and spoke to Rodriguez for approximately eight minutes. (Def. Ex. HH ¶ 29).

In the course of the investigation, agents uncovered evidence that Rodriguez and Espinal had engaged in real estate transactions together and were cosignatories on a bank account. They had used money in the account to purchase a property in Sullivan County, New York, which they dubbed Fly Fisherman's Heaven (" FFH" ). (Gov't Ex. B at 18). The government contends that the account was being used to launder drug money. (Id.).

On July 19, 2010, the government applied for authorization to intercept Rodriguez's " money phone," a cellphone Rodriguez allegedly was using to discuss laundering his dirty cash. (Gov't Ex. F). This was the same phone that Rodriguez had used to call Espinal after the $25,000 had been seized during the vehicle stop. On September 23, 2010, the government sought leave to intercept Espinal's cellphone. (Def. Ex. HH). The wiretap authorizations were granted and later reauthorized for an additional month.

C. Prior Proceedings and Trial Delays

The government indicted Espinal on December 8, 2011, and filed superseding indictments on February 7, 2012, and July 26, 2012. (Dkt. Nos. 686, 877).

On January 22, 2014, the charges against Espinal were severed from those of the more than fifty other defendants. (Dkt. No. 1362). On February 13, 2014, Judge Swain, before whom the case was then pending, set trial for April 28, 2014. (Dkt. No. 1374). On February 26, 2014, Espinal's case was reassigned to me. On March 6, 2014, I set a trial date of August 4, 2014.

The government filed a " Trial Indictment," S31-R 10 Cr. 905, on July 16, 2014, redacting many of the allegations. (Dkt. No. 1565-1). The Trial Indictment, which sets forth only charges against Espinal, contains seven counts, as follows: Count One (racketeering, based on three racketeering acts), Count Two (racketeering conspiracy), Count Three (money laundering conspiracy), Counts Four and Six (obstruction of justice), and Counts Five and Seven (conspiracy to obstruct justice). (Id.).

On July 24, 2014, I heard oral argument on the parties' motions in limine. I excluded some of the government's proposed evidence, allowed some, and deferred decision on other evidence. On July 26, 2014, nine days before trial was to begin, the government produced to defense counsel a computer disk containing more than 1,500 recorded telephone phone calls, most or all in Spanish, and more than 2,000 pages of line sheet summaries of the calls. (Dkt. No. 1582 at 15-16). At a conference on July 29, 2014, defense counsel argued that some of the newly disclosed 3500 material might in fact be Brady material, and that they needed additional time to review the calls. I adjourned the trial until September 8, 2014. (Dkt. No. 1582).

On September 4, 2014, just four days before the start of the rescheduled trial, the government made additional disclosures to counsel; defense counsel contended that these included Brady material that should have been disclosed much earlier. (Dkt. No. 1611 at 9-14). Also on September 4, 2014, the government notified counsel by letter that it had just learned that one of the potential government witnesses had been asked by the government in 2012, after Espinal had been indicted and was represented by counsel, to wear a

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recording device during a conversation with Espinal. The government advised that it was in the process of trying to determine whether the recording still existed. (Dkt. No. 1611 at 14-21, 25).

I saw the parties the next day, September 5, 2014. Defense counsel indicated that they intended to file a motion to dismiss the indictment. In contemplation of this motion and briefings from both parties, and in part because there was an open question of whether there existed a recording of Espinal, I again adjourned the trial, until October 14, 2014. (Dkt. No. 1611). Thereafter, by letter dated September 17, 2014, the government notified defense counsel that it did not intend to proceed at trial on Counts One, Six, or Seven. (Def. Ex. Y).

Espinal filed the instant motion to dismiss on September 24, 2014. (Dkt. No. 1618). On October 7, 2014, in light of the motion, I once again adjourned trial until February 2, 2015. I heard oral argument on October 21, 2014, at the conclusion of which I reserved decision. (Dkt. No. 1628 (" 10-21-2014 Oral Arg. Tr." ) at 44).

On January 21, 2015, at the request of the parties, I adjourned the trial again, until April 27, 2015. The government advised that two new AUSAs would be taking over the case.


Espinal moves to dismiss the indictment on the grounds that the government engaged in such egregious prosecutorial misconduct that his right to due process was violated. (Def. Mem. at 49 (citing United States v. Chapman, 524 F.3d 1073, 1084 (9th Cir. 2008)). In Chapman, the Ninth Circuit held that while the appropriate remedy for a Brady violation and other constitutional violations " will usually be a new trial, a district court may dismiss the indictment when the prosecution's actions rise . . . to the level of flagrant prosecutorial misconduct," 524 F.3d at 1086 (citation omitted). Espinal argues in the alternative that even if the government's misconduct here did not violate his constitutional rights, the indictment should be dismissed pursuant to the Court's supervisory powers. (Def. Mem. at 49-50 (citing Chapman, 524 F.3d at 1084, and United States v. Turner, 23 F.Supp.3d 290 (S.D.N.Y. 2014) (court has " authority to dismiss the indictment" pursuant to supervisory powers doctrine, but declining to do so " absent demonstrable prejudice, or substantial threat thereof" )).

I discuss in turn (a) the government's conduct, (b) whether Espinal's rights were violated, and (c) the appropriate remedy.

A. The Government's Conduct

The government has engaged in a pattern of troubling and overly aggressive conduct in this case. I discuss some of these actions below.

1. The Government's Effort to Record Espinal

In January 2012, the government apparently learned that a cooperating witness (" W-1" )[2] had been asked by a third person to meet with Espinal. (Gov't Ex. R at 2). The government instructed W-1 to meet with Espinal and to record the meeting surreptitiously. W-1 did so on January 23, 2012; he recorded the meeting, without Espinal's knowledge or consent, and even though Espinal was already under indictment and was represented by counsel. Due to potential Massiah issues, a " wall AUSA" was assigned to handle this portion of the investigation, and coordinated

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with a Homeland Security Investigations (" HSI" ) " wall agent," Special Agent Daniel Callaghan. (Gov't Exs. R, S, V; Def. Ex. EE). In 2013, even though he was the " wall agent," Callaghan was reassigned by HSI to be the case agent for the entire investigation of the Enterprise. (Gov't Opp'n 27 n.17). Callaghan subsequently served as the case agent for the trials of two of Espinal's original co-defendants, and was slated to serve as the case agent for Espinal's trial in 2014, until defense counsel raised this issue. (Id.).

The defense was not given notice of the recording until almost two-and-a-half years later. In July 2014, an AUSA who had previously worked on the case was reassigned to it and remembered that there had been an effort to record a meeting with Espinal. (Gov't Opp'n 28 n. 18). The AUSA then attempted to determine whether a recording had been made and asked the " wail AUSA" and HSI for clarification. A search was made and no recording was found. The " wall AUSA" and HSI indicated that they believed no recording had been made.

On September 4, 2014, just a few days before trial was to commence, the government met with W-1 and he recalled that a recording had been made on January 23, 2012. (Def. Ex. CC). The government renewed its effort to find the recording, which apparently had not been " logged in" properly by HSI, and finally located the recording on September 19, 2014, when it provided a copy to defense counsel, pursuant to Fed. R. Crim. P. 16. (Def. Ex. Z). Draft transcripts and summaries of Spanish language telephone calls between W-1 and Espinal were provided to counsel. (Gov't Exs. U, V, W).

In the September 4 meeting with the government, W-1 recalled that during the meeting with Espinal, he " asked Espinal what was going on with his situation with the government." (Def. Ex. CC). And in a meeting with the government on September 12, 2014, W-1 said that he had been " picked up in the van by agents and told to go into [Espinal's] office and ask [Espinal] about or bring up the subject of his situation. (Which he interpreted to be Espinal's case.)" (Def. Ex. DD; see also Def. Ex. W). W-1 further recalled that " Espinal was very curt and changed the subject. Espinal didn't want to talk about his case with the government." (Def. Ex. CC; see also Gov't. Ex. V). After the meeting, the agents relayed to the AUSAs that nothing of investigatory interest had been said. One AUSA emailed another to report: " Just heard from the wall agent. Nothing happened." (Gov't Ex. T).

The government contends that it instructed W-1 not to initiate any conversation with Espinal about the criminal proceedings.[3] I am skeptical, because the notes from the two interviews suggest W-1 was firm in his recollection that he was told to ask Espinal about his case, and then subsequently did so. Ele had no reason to lie in this respect in his debriefings with the government. On the other hand, the transcript of the meeting is not conclusive, as portions of it are ...

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