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March 10, 1978


The opinion of the court was delivered by: STERN

 Defendant Anthony La Duca stands convicted of willful embezzlement of funds of the Paper Industry Union Management Pension Fund, in violation of 18 U.S.C. § 664. He now moves, pursuant to Rule 33 of the Federal Rules of Criminal Procedure, for a new trial on the ground of newly discovered evidence. The claimed newly discovered evidence consists of the testimony of La Duca's co-defendant John Neiman. Neiman had pleaded guilty and was awaiting sentence at the time of La Duca's trial. Called to the stand by La Duca during trial, Neiman invoked his Fifth Amendment privilege and declined to testify. Now, long after Neiman's sentencing and after denial of several applications for reduction of sentence, Neiman states that he is prepared to exculpate La Duca by testifying that he, Neiman, alone was guilty of the crime charged. This case thus presents the recurring and troublesome question: Under what circumstances will a new trial be required where an individual who has invoked the privilege against self-incrimination and has not testified at the trial of his co-defendant comes forward after trial and conviction of that co-defendant and purports to be able and willing to give testimony exculpatory of him.

 On February 3, 1975, a federal grand jury returned an indictment charging Anthony La Duca, John Neiman, Guido Rocco, and Herman Levine with conspiracy to steal money from a pension fund, in violation of 18 U.S.C. § 371; embezzlement of money of a pension fund, in violation of 18 U.S.C. § 664; misapplication of bank funds, in violation of 18 U.S.C. § 657; and several other crimes. On November 24, 1975, Neiman pleaded guilty to the conspiracy count. On January 19, 1976, the government moved the trial of La Duca on the embezzlement count alone. The charges against Levine and Rocco were eventually dismissed.

 The government's proofs at trial showed that La Duca, a disbarred attorney, met Neiman in federal prison where both were incarcerated, La Duca following conviction on federal perjury charges. Their scheme to embezzle pension funds began at least as early as December 1973, when La Duca and Neiman presented to a New Jersey bank a $100,000 check drawn on an account of the Paper Industry Union Management Pension Fund and payable to the pension fund. Neiman introduced himself to the bank officers as a financial consultant to the pension fund, a position which he did not hold, and he exchanged the check for a $100,000 certificate of deposit payable to the fund. Shortly thereafter, Neiman and La Duca returned to the bank and proposed another transaction. This time they possessed three $100,000 checks drawn on the fund and payable to the bank. They requested that the bank issue three $100,000 certificates of deposit -- two payable to the pension fund and one payable to Playmate Enterprises, Inc., a corporation formed by Neiman and La Duca. The bank officers informed Neiman and La Duca that the bank could not issue a certificate of deposit to a private corporation on a check drawn against a pension fund, and refused to participate in the proposed transaction.

 Neiman and La Duca immediately borrowed $80,000 against the certificate of deposit that was payable to Playmate Enterprises, Inc. This money was deposited in Playmate's checking accounts. Twenty thousand dollars was immediately drawn out in cash. Within several months, the remainder of the money had been withdrawn from the Playmate accounts on checks signed by Neiman and/or La Duca and payable in large part to cash.

 La Duca took the stand. His defense was that he was without criminal intent. He testified that he believed that Neiman was authorized to possess monies of the pension fund and to invest them in commercial ventures like Playmate Enterprises, Inc.

 The jury deliberated less than two hours and returned a verdict of guilty. The conviction was affirmed by the Court of Appeals for the Third Circuit. Certiorari was denied. La Duca was sentenced to a three-year term; on Rule 35 motion, the sentence was later reduced to 18 months. The defendant is presently incarcerated.

 The motion now before the Court is based on the affidavit of John Neiman. Neiman therein states that La Duca approached him early in 1973 with an idea for a business venture. Neiman told La Duca that he would be interested in a partnership and that he, Neiman, could obtain all necessary financing. He states that in late 1973 he was approached by Theodore Potash who offered, for a fee, to introduce him to a source of investment capital. Potash introduced him to James Fabio, the administrator of the pension fund. Fabio was Neiman's source for the checks. In return, Neiman paid Potash and Fabio. According to the Neiman affidavit:

La Duca had no knowledge of these meetings, nor did he have knowledge of how, where, or why the money was given to me. . . .

 Neiman affidavit, Sept. 20, 1977, Para. 8.

 Neiman further states that:

Prior to and at the actual time of receipt of the money by me, both La Duca and his wife interrogated me regarding the propriety of the funds and I assured them that it was a perfectly legal business transaction and that the unions made investment loans every day of the year. . . . I am convinced that if the La Duca's were remotely aware that the loans were even tainted by illegality, they would have disassociated themselves from our business ventures immediately.

 Id., Para. 10. *fn1"

 This Court is entitled to view with some skepticism a motion for a new trial based on "newly discovered evidence" which exists only because a convicted defendant who had earlier availed himself of his privilege not to testify comes forward later with an affidavit in which he states that he is now prepared to exculpate his co-defendant. Such a claim is inherently suspect. See United States v. Jacobs, 475 F.2d 270, 286 n.33 (2nd Cir.) (Friendly, C.J.), cert. denied, 414 U.S. 821, 38 L. Ed. 2d 53 (1973).

 Under some circumstances, the granting of a new trial so that such testimony can be presented to a jury is a result which is just and proper. But in the great majority of cases there is an unspoken premise which, once recognized, must cause a court to proceed with caution.

 The Court cannot be blind to the real possibility that the defendant who stood trial did not genuinely desire that his pleading co-defendant testify at that trial, and thus ...

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