The opinion of the court was delivered by: BIUNNO
The indictment, in 19 counts, charges four individuals and one corporation with various federal offenses. These are summarized as follows:
Count 1: Charges a conspiracy to defraud the United States and the Internal Revenue Service, as to all defendants, 18 U.S.C. § 371;
Count 2: Charges all defendants except Hellman with a violation of 18 U.S.C. § 1001, and aiding and abetting under 18 U.S.C. § 2, in respect to the 1973 report of costs for 1972;
Counts 3 & 4: Make the same charges as Count 2 except that defendant Hellman is included, in respect to the cost reports for 1973 and 1974;
Count 5: Makes the same charges as Counts 2, 3 and 4 in regard to the cost report for 1975, including defendant Hellman but not charging defendant Shmidman;
Counts 6, 7, 8 and 9 charge defendant Israel Braunstein with subscribing, etc., false tax returns for Liberty House for each of the years 1972 through 1975; 26 U.S.C. § 7206(1);
Counts 10 through 13 charge defendant Moses Braunstein with aiding and assisting, etc., in the preparation of false tax returns for Liberty House for the years 1972 through 1975, 26 U.S.C. § 7206(2);
Counts 14 through 16 make the same charges against defendant Shmidman for the years 1972 through 1974, 26 U.S.C. § 7206(2);
Counts 17 through 19 make the same charges against defendant Hellman for the years 1973 through 1975, 26 U.S.C. § 7206(2).
Basically, the charges focus on an alleged practice of charging to and having paid by Liberty House Nursing Home of Jersey City various items of capital or operating expense not properly chargeable to it. The theme is that this practice, charged to have been in execution of the conspiracy, resulted in false cost statements being made in a matter within the jurisdiction of HEW, an agency of the United States, in the administration of the Medicaid program, as well as in false tax returns for the nursing home.
Israel Braunstein is alleged to have been a 25% Owner of Liberty House, as well as its President and Administrator.
Moses Braunstein is alleged to have been a 50% Owner of Liberty House, as well as its Secretary and Comptroller.
Miriam Shmidman is alleged to have been a 25% Owner of Liberty House, as well as its Treasurer and employee.
Leon Hellman is alleged to have been a purchasing agent, from about February, 1973 to about December, 1975, for Liberty House as well as for other nursing homes owned by Moses Braunstein.
Since one or another defendant joined in motions made by others, the dispositions are on an item-by-item basis without regard to which defendant made the motion, and which ones joined in it.
Motion to sever the trial of Moses and Israel Braunstein.
This motion is based on the proposition that if Moses Braunstein exercises his right to take the stand in his own defense, or as a witness for Israel Braunstein, he would be subject to cross-examination which may call on him to testify against Israel Braunstein, contrary to his religious principles and contrary to Israeli law said to embody those principles. In sum, the contention is that a joint trial would confront him with an irreconciliable conflict between his secular legal rights and his religious beliefs.
The only material submitted is a supposed translation of sections 3 and 4 of what is said to be the Israeli Evidence Ordinance (secular), and two pages from what appears to be an unidentified edition, in English, of Talmud (religious).
As is well known, Jewish religious law is founded on Torah, the written law as given by the Lord to Moses and embodied in the first five books of the Old Testament. This written law, which may be likened to a written constitution and statutes, is supplemented by "oral law", or "Torah by Mouth". This oral law consists of both Mishnah, a systematic collection of religious-legal decisions developing the laws of Torah, and Gemara, comprising supplemental material by way of Rabbinical interpretation by various scholars. These three major components, along with Tosephta, Mishradin and Targumin, represent the body of orthodox Rabbinical literature connecting Torah with medieval and modern Judaism.
Talmud itself developed through two streams: one resulted in the Palestinian recension of Mishnah and Gemara; the other resulted in the Babylonian recension.
For an extensive general review of these and other materials, see Encyclopaedia Brittanica, 11th Edition, "Talmud".
In any event, it is of interest to examine the written law, Torah. A brief inspection discloses a number of written laws pertinent to the question presented. Thus, the law is written:
. . . "Ye shall not . . . deal falsely, neither lie one to another," Leviticus, xix., 11.
. . . "Thou shalt not defraud thy neighbor", Leviticus, xix., 13.
. . . "If a soul sin . . . and lie unto his neighbor in that which was delivered to him to keep . . . or hath deceived his neighbor . . . in any of all these that a man doeth, sinning therein:
"Then it shall be, because he hath sinned, and is guilty, that he shall restore . . . the thing which he hath deceitfully gotten . . . (and) he shall even restore it in the principal, and shall add the fifth part more thereto, and give it unto him to whom it appertaineth." Leviticus, vi., 2-4.
. . . "And it shall be when he shall be guilty in one of these things, that he shall confess that he hath sinned in that thing." Leviticus, v., 5.
. . . "Therefore shall ye observe all my statutes, and all my judgments, and do them." Leviticus, xix., 37.
. . . "When a man or woman shall commit any sin that men commit, to do a trespass against the Lord, and that person be guilty, then they shall confess their sin which they have done and he shall recompense his trespass with the principal thereof, and unto it the fifth part thereof, and give it unto him against whom he hath trespassed." Numbers, v., 6-7.
Thus, one difficulty with the motion is that the claimed dilemma arises only because Moses (for example) wants to rely in one respect on secular law, and in another respect on religious law, selecting from each that which seems most advantageous. This is an artificial, self-inflicted dilemma. If he has any right to choose between secular law and religious law (for the sake of argument), the choice is only between all of one or all of the other, but not a choice between some favorable parts of one and another favorable part of the other; especially where claiming a right under secular law would violate religious law. The reason for this is that to do so establishes that he is not bound, or does not feel himself bound, by the principles of the orthodox religion. Religious belief is the underpinning of the motion, and so a claim of right to adhere to it in one respect but not another indicates that the underpinning itself is a sham and a delusion.
No doubt the argument would run that what is said in Torah and Talmud by way of duty, of commandment, and the like, has only religious, not secular consequences. But to make that argument is to concede that the question is governed, in a secular court, by secular law and not religious principles. There is no doubt that the written law of Amendment I declares that the Congress shall make no law prohibiting the free exercise of religion, but this does not go so far as to require that the secular law governing the trial of criminal cases must give way to the religious beliefs of every accused or of every witness. Compliance with secular law in a secular court does not infringe the individual's free exercise of his religion. It does not oblige him to alter his beliefs, even though it may compel him to do an act contrary to those religious beliefs. To the extent it does, the act is not of his own will but is one compelled by law, and he remains free to believe that it is contrary to the principles of his religion.
Beyond that, the point advanced is plainly without substance because it is wholly unrelated to the matter of joint trial or severance. Precisely the same situation would prevail if Moses had not been charged, and were called as a witness by either the United States or by Israel, in the trial of a charge against Israel.
This is further emphasized by an examination of the orthodox religious law particularly relied on to support the motion for severance. The examination begins with the injunction in Torah, that: "The fathers shall not be put to death for the children, neither shall the children be put to death for the fathers: every man shall be put to death for his own sin." Deuteronomy, xxiv, 16. This was interpreted to prohibit the testimony of parents against children and of children against parents. This interpretation served as the source for a disqualification of relatives in general. The Mishnah lists a father, brother, uncle, brother-in-law, stepfather, father-in-law and their sons and sons-in-law as disqualified relatives; and this rule was extended to cover nephews and first cousins.
The important point about these rules is that the disqualified witness could not testify at all, whether for or against the relative. For that reason, the party himself is incompetent to testify for or against himself, because "a man is related to himself." Thus, the party cannot testify at all, and everything he says in court is mere pleading, presumably to be established by competent evidence. See, Encyclopedia Judaica, "Witness", p. 588.
Accordingly, if Moses is entitled to press his religious beliefs as having constitutional priority over secular law, he will (1) be relying on secular law to support the proposition and (2) under the orthodox religious law he advances, he cannot testify at all, whether there be a joint trial or separate trials.
If the claim had any color of validity, of course, it would be necessary to conduct a preliminary inquiry under Fed.Ev.Rule 104 to ascertain whether Moses does in fact adhere to all the laws, principles and tenets of the orthodox religion he professes, and whether Israel is in fact his son. The court has nothing before it at this time to provide a basis for such a determination, and as the foregoing analysis indicates, such an inquiry would need to explore all the aspects in regard to which the religious law conflicts with secular law, in order to determine the genuineness of the claim of religious adherence.
For the foregoing reasons, the motion to sever the trials of Moses and Israel is DENIED.
The "deposition" of Moses Braunstein.
During the investigation stage of this matter, Moses Braunstein was interviewed by a representative of the U.S. Attorney's office and a representative of the State of New Jersey. The interview was conducted at the New York apartment of Moses Braunstein's lawyer, who is said to have been confined at home recovering from hepatitis. The interview was recorded stenographically, and a transcript was prepared. All of the defendants either have a copy of the transcript or access to it.
In the course of the interview, Moses Braunstein made various statements about one or another co-defendant. In at least one instance, the statement included what might be called a disclosure of a statement against interest by a co-defendant to Moses Braunstein.
It appears that the statement was taken and recorded in the fashion it was in order to accommodate Moses Braunstein's attorney, and that there was some understanding in respect to how the transcript was expected to be used. Although three lawyers were present, none took the precaution to state for the record what the terms of the understanding were. In this posture, its accurate reconstruction would doubtless be an exercise in futility.
The representation is that in the federal proceedings, while no witness was present and testifying, a CSR was present but did not make a verbatim record of what was read to the Grand Jury. Instead, the reporter took notes of the page and line of excerpts where portions read to the Grand Jury began, but not where they ended. As a consequence, it is impossible to determine just what parts were read. Evidently, for the purpose of the reading, there was not either a pre-marked copy to indicate what was read, or a list of segments delineated by page and line from start to end of each segment. For the purpose of the motion, the court accordingly has no choice but to assume that the entire transcript was read.
On this assumption, the court finds no basis to support any of the motions grounded on this state of facts. Although taken in the form of a deposition, the transcript amounts to nothing more than a statement of Moses Braunstein, as defined by the Jencks Act, 18 U.S.C. § 3500. By paragraph (e) of that Act, a "statement" is defined as including (among other forms):
"(2) a stenographic recording . . . or a transcription thereof, which is a substantially verbatim recital of an oral statement made by said witness and recorded contemporaneously with the making of such oral statement."
Once the United States has such a "statement" in its possession (whether disclosed to a Grand Jury or not), a number of consequences follow. Under F.R.Crim.P. 16(a)(1)(A), if the witness be a defendant, he is entitled to a copy of it. Also, if it contains exculpatory material in respect to another defendant, then under Brady, a copy must be furnished to that defendant. Further, if the statement includes material inculpating some other defendant under the Bruton rule, then if there is to be a joint trial, that material is to be deleted (i. e., the statement is to be "redacted" or edited for that purpose) and copies furnished. These matters are all governed by the standard discovery order entered at arraignment in every criminal case in this district since the Speedy Trial Act took effect in the fall of 1975.
The final consequence is that should the witness be called to testify by the United States, then at the end of his direct examination the court is required to order the statement produced before cross-examination. 18 U.S.C. § 3500(b). Since Moses Braunstein is a defendant and so cannot be called as a witness by the United States, and since all defendants at least have access to a copy of the statement, this consequence has no significance in this case.
Finally, should Moses Braunstein take the stand to testify, as it is his right to do if he so chooses, the entire statement may be used, and the rule of Bruton will not apply since he will be subject to cross-examination by any party who chooses to ask questions.
Also, in this connection, and subject to everything said so far, in the event that Moses Braunstein takes the stand at trial, the statement would not be hearsay under the definition of Fed.Ev.Rule 801(d)(1)(A) or (B).
The objections and motions directed to the use of this statement before the Grand Jury are without merit or substance. The fact that this statement was taken formally, as though on deposition, with an attorney for the United States, for the State of New Jersey and for the witness all present and participating, does not affect or alter its character as a "statement" of Moses Braunstein. It is no different than any other "statement" so defined by the Jencks Act, in whatever form it is obtained and however presented, even if all of it was read, or even if it had been marked as a Grand Jury exhibit for the jurors to inspect at leisure.
Grand Juries only decide whether criminal charges should be made. Only 16 of the 23 jurors need be present, and only 12 need vote to return an indictment. They do not pass on guilt. Consequently, while the points advanced may call for one or another ruling on the admissibility of evidence at trial, none of them supports any of the motions now made. All motions grounded on this state of facts are accordingly DENIED.
The coordinated Federal and State investigations and indictments.
A number of motions are grounded on the fact that both federal and state officials conducted investigations in respect to Liberty House, and that separate indictments were returned the same day by a federal and a state Grand Jury. The New Jersey indictment charges violations of state law, namely a statutory conspiracy plus substantive offenses denounced by state Medicaid legislation. The indictment here, as noted at the outset, charges a conspiracy to violate federal law (18 U.S.C. § 371), substantive violations of 18 U.S.C. § 1001, and substantive violations of the income tax law, 26 U.S.C. § 7206. Since Liberty House is a New Jersey corporation, the state could have charged violations of the Business Corporation Tax Law, under which the tax is calculated by two components: net worth and taxable income, but the state evidently chose not to do so.
New Jersey law affords considerably broader discovery in a criminal case than the Congress was willing to allow when it disapproved a number of proposed rules changes in 1975. From the New Jersey discovery, defendants have learned that transcripts of testimony before the federal Grand Jury were presented to the state Grand Jury, and this is relied on for a claim to have discovery of all the federal Grand Jury testimony. The assertion is also made that release of the federal material for state use may have been contrary to the command of secrecy under F.R.Crim.P. 6(e).
Finally, dismissal of the federal indictment is sought on the ground of the Petite policy established some years ago by Attorney-General Rogers in respect to federal/state indictments arising out of a particular act or course of conduct.
Under our national system of federal and state dual sovereignty, no constitutional or other legal principle bars prosecution by both jurisdictions in these circumstances. The same act or conduct may violate not only a group of laws of the same jurisdiction, but also a group of laws of several jurisdictions. In either case, the "violation" turns upon both a state of facts and a particular law. Any conviction that ensues is not for the state of facts as such, but for the violation of the particular law that is applicable.
No doubt it may be argued that it would be desirable to conduct a single, joint trial when there are charges of violating both state and federal laws. However, no mechanism or authority exists for such a trial. The federal courts are vested with exclusive jurisdiction to try federal offenses, and the state courts have exclusive jurisdiction to try state offenses. The only circumstances under which state criminal charges may be tried in a federal court ...