The opinion of the court was delivered by: LECHNER
The Government charges many of the fourteen defendants in this action with engaging in a conspiracy and with carrying out fraudulent activities in connection with their dealings with a corporation, Laser Arms Corporation ("Laser Arms"), which at all relevant times is alleged to have had fictitious executives and no legitimate assets. More particularly, the Government charges certain of the defendants with conspiracy to defraud investors in Laser Arms, certain of the defendants with actually perpetrating the fraud and certain of the defendants with related unlawful actions. In addition, the Government charges some of the defendants with conspiracy to obstruct administration of justice, and some with a wire fraud violation. Some of the defendants in these last two charges are not formally charged with participating in the Laser Arms securities wrongdoings. Eight of the fourteen defendants named in the indictment have raised various pretrial motions. For the sake of convenience, I address all of these motions in a single opinion.
The defendants relevant for purposes of these motions are as follows. Marshall Zolp, who has numerous aliases, appears to be the principal defendant in this action. At all times relevant he is alleged to have wholly owned the Equities Processing and Clearing Corporation ("EPC"), and to have maintained an account at the United Bank of Lea County, located in Hobbs, New Mexico.
Barbara Baker is alleged to have been an associate of Zolp who, in May, 1986, posed as an owner of EPC and opened an EPC account at the Reliance Savings & Loan Association ("Reliance S & L"), located in Rahway, New Jersey. Morton Berger is alleged to have been an attorney representing Laser Arms and Zolp at all relevant times. Phillip Avery Bernick is alleged to have been employed as a stock trader in December, 1985 at S.W. Devanney and Co., a stock brokerage firm located in Denver, Colorado. In May, 1986, Bernick became president of Allison Securities, another Denver stock brokerage firm.
The indictment charges that on December 26, 1985, Zolp and Bernick mailed an application to the National Quotations Bureau ("NQB"), a stock price quotation service for over-the-counter stocks, located in Jersey City, New Jersey. The Government charges that Zolp, Bernick and others, by submitting this application, intended "to deceive the NQB and regulatory agencies into permitting the sale of Laser Arms stock to the investing public when, in truth and in fact, said stock was neither registered nor exempt from registration as required by federal securities law." (Indictment at p. 6.) Zolp and others are alleged to have generated fictitious corporate documents, sold Laser Arms shares to stock brokerage houses when they knew Laser Arms had not been incorporated, and established brokerage accounts by which they secretly profited on trading Laser Arms stock. (Id. at pp. 6-7.)
In January and March, 1986, defendants are alleged to have fabricated "Reports to Shareholders" using photographs of unknown actors to depict the fictitious executives of Laser Arms. In February, 1986, Zolp and others allegedly issued a false press release stating Laser Arms had developed, and obtained a patent for, a self-cooling beverage can that would automatically chill its contents upon opening. On April 7, 1986, Zolp and others advertised this non-existent product in the Wall Street Journal. (Id. at p. 9.) Furthermore, on May 8, 1986, Zolp, Livieratos and others staged a press conference at the World Trade Center in New York to display a fraudulent prototype of the self-cooling can. (Id. at p. 7.) All of these activities allegedly were undertaken to promote the sale of Laser Arms' worthless stock to the investing public.
On April 21, 1986 the Securities and Exchange Commission ("SEC") suspended trading in Laser Arms stock for a ten day period. On April 30, 1986, the SEC obtained a court order from Judge Conner of the United States District Court for the Southern District of New York, freezing all of Zolp's and Laser Arms, assets. On May 16, 1986, Judge Conner entered a preliminary injunction continuing the freeze imposed upon the assets pending termination of the SEC's investigation. On June 23, 1986, Judge Conner extended the freeze order to include the $ 150,000.00 in the EPC account at the Reliance S & L. (Superseding Indictment at p. 4.)
On April 24, 1986, shortly after the SEC had suspended trading in Laser Arms stock, Zolp and another defendant allegedly caused others to open the EPC account at the Reliance S & L, by using "a fake signature of a fictitious person named 'Morris Wallace,'" on the signature card submitted with the application to open the account. (Indictment at p. 17.) On April 24, 29 and 30, 1986, Zolp and Bernick transferred $ 300,000.00, "the proceeds of the Laser Arms fraud," from accounts in Hobbs, New Mexico and Denver, Colorado to the EPC account at the Reliance S & L in Rahway, New Jersey. (Superseding Indictment at p. 13.) On May 1, 1986, the $ 300,000.00 was withdrawn from the EPC account at the Reliance S & L, $ 50,000.00 in cash and $ 250,000.00 by bank check. (Id.) On May 8, 1986, Zolp and other defendants caused an additional $ 150,000.00 in cash to be deposited in the EPC account at the Reliance S & L. Also on May 8, 1986, at Zolp's instruction, Baker and Castellano portrayed themselves to Reliance S & L officials as independent new owners of EPC and the EPC account. (Indictment at p. 17.)
The record indicates Judge Debevoise, in an order signed on May 2, 1986, authorized Government officials to conduct surveillance of the ITM telephones in Andover, New Jersey for a thirty-day period. Subsequent orders, signed by Judge Debevoise on May 31 and June 30, 1986, Judge Fisher on July 30, 1986, and Judge Cowen on August 29, 1986, authorized extensions on the initial ITM wiretap application. Furthermore, in an order signed August 11, 1986, Judge Debevoise authorized Government officials to conduct telephone surveillance of Baker's home residence for a thirty-day period. Also, in an order signed June 10, 1986, Judge Griesa, District Judge from the Southern District of New York, authorized Government officials to conduct telephone surveillance of a certain office located in downtown Manhattan for a thirty-day period.
In a telephone conference call intercepted by the Government at the ITM offices on May 12, 1986, Zolp, Baker, Castellano, Berger and another defendant, Lorenzo Formato, allegedly agreed to create a false explanation and false documents to explain to the SEC the source of the $ 150,000.00 deposited in the EPC account at the Reliance S & L on May 8, 1986. (Id. at p. 18.) Baker, on June 5, 1986, and Quinn, on June 13, 1986, allegedly gave false information to an SEC employee inquiring about Zolp and the EPC account. This misinformation served to conceal Zolp's whereabouts, and his control over EPC and its assets. (Id. at pp. 18-20.)
The Government filed its indictment in this case on September 18, 1986. Count one charges Zolp, Bernick, Boose, Livieratos and six others with combining and conspiring "to use and employ manipulative and deceptive devices and contrivances in connection with the purchase and sale of a security not registered on a national securities exchange," in violation of 17 C.F.R. § 240.10b-5 and 15 U.S.C. §§ 78j (b) and 78f (f). The count concludes the alleged actions violate the federal conspiracy statute, 18 U.S.C. § 371. Count two charges Zolp, Bernick, Boose, Livieratos and six others with using "manipulative and deceptive devices and contrivances . . . in connection with the purchase and sale of a security not registered on a national securities exchange," contrary to 17 C.F.R. § 240.10b-5. The count concludes the alleged actions violate 15 U.S.C. §§ 78j (b) and 78f (f) and 18 U.S.C. § 2.
Count three charges Zolp and Bernick with devising a scheme and artifice to defraud "by selling to the investing public worthless stock of an unincorporated company with no management and no product," and with initiating the scheme by filing the Laser Arms application with the NQB. The count charges mail fraud in violation of 18 U.S.C. §§ 1341 and 2. Count four charges Zolp and Bernick with transferring $ 300,000.00 from the bank accounts in Colorado and New Mexico to the EPC account at the Reliance S & L, thereby causing fraudulently obtained or stolen funds to be transported in interstate commerce. The count alleges violations of 18 U.S.C. §§ 2314 and 2.
Count five charges Zolp, Baker, Castellano, Berger, Quinn and one other defendant with conspiring and agreeing
to corruptly endeavor to influence and impede a judge of the United States District Court (S.D.N.Y.) in the discharge of his duty to preside over the SEC civil proceedings, and to knowingly and wilfully corruptly influence, obstruct and impede, and endeavor to influence, obstruct and impede the due administration of justice, contrary to Title 18, United States Code, Section 1503.
(Id. at pp. 16-17.) This count asserts Zolp and these other defendants agreed to attempt to devise a plan for assisting Zolp in circumventing the freeze Judge Conner had imposed upon the assets of Zolp and Laser Arms, all in violation of 18 U.S.C. § 371. Finally, count six charges Zolp, Baker, Castellano, Berger and another defendant with devising a scheme to defraud investors out of the $ 150,000.00 remaining in the EPC account at the Reliance S & L. The count alleges that defendants' use of the interstate telephone system in devising this scheme constituted wire fraud in violation of 18 U.S.C. §§ 1343 and 2.
To support the charges contained in this indictment, the Government will rely in part on evidence secured via: (1) telephone surveillance of the ITM facility, located in Andover, New Jersey; (2) telephone surveillance of the Baker residence, located in Alpine, New Jersey; (3) telephone surveillance of offices subscribed to by the N.Y. Bagel Manufacturing Corporation, located at 130 William Street, New York, New York; (4) a search conducted at the Denton & Co. facility located at 5 Marine View Plaza, Hoboken, New Jersey; (5) a search of storage units 1112 and 1002 located at Keeper's Self Storage, 201 64th Street, Brooklyn, New York; (6) a search conducted at Zurich Depository Corp., located at 1165 Northern Boulevard, Manhasset, New York; (7) a search conducted at the aforementioned ITM facility; and (8) a search conducted at the aforementioned Baker residence. The sufficiency of the affidavits supporting the Government's applications for authorization to conduct these surveillances and searches will be discussed, infra, in light of defendants' specific challenges.
Many of the defendants' motions raise common issues. Where necessary, I address particular points raised by individual defendants. Various defendants, through counsel, have orally requested, or have submitted letters requesting, they be permitted to join other defendants' motions. Some of the requests are somewhat unspecific. Without passing judgment on the procedural propriety or practical efficacy of such requests, this opinion will address all aspects of those requests.
Many of the defendants have moved, pursuant to Rule 12 (b) (5) and Rule 14 of the Federal Rules of Criminal Procedure, that they be severed from the trial of the other defendants. In relevant part, Rule 14 provides: "If it appears that a defendant or the Government is prejudiced by a joinder of offenses or of defendants in an indictment or information or by such joinder for trial together, the court may order an election or separate trials of counts, grant a severance of defendants or provide whatever other relief justice requires." These defendants each claim his or her alleged involvement in the actions described in the indictment was non-existent or, at most, incidental to other actions alleged in the indictment. Each of these defendants claim that if forced to proceed in this trial, he or she will be irreparably prejudiced at trial by the Government's evidence against the other defendants. A review of controlling case law indicates that such motions for severance are not lightly granted.
As defendants must concede, the courts have displayed a marked preference for permitting joint trials in cases such as the one at bar, involving ongoing investigations with overlapping and intertwined actors and evidence. See, e.g., United States v. Wright-Barker, 784 F.2d 161, 175 (3d Cir. 1986); United States v. De Peri, 778 F.2d 963, 983 (3d Cir. 1985), cert. denied, 475 U.S. 1110, 106 S. Ct. 1518, 89 L. Ed. 2d 916 (1986); United States v. Reicherter, 647 F.2d 397, 399-400 (3d Cir. 1981). Joint trials in such cases further the legitimate concern with fostering judicial economy. See, e.g., Reicherter, 647 F.2d at 400; United States v. Thomas, 610 F.2d 1166, 1170-71 (3d Cir. 1979). In addition, joint trials in these types of cases "recogniz[e] the tactical disadvantage to the Government from disclosure of its case [in the event severance is granted]." United States v. Jackson, 649 F.2d 967, 973 (3d Cir.), cert. denied, 454 U.S. 871, 102 S. Ct. 341, 70 L. Ed. 2d 176 (1981).
To succeed on a Rule 14 motion for severance, a defendant must demonstrate he will be substantially prejudiced by having to participate in a joint trial at which evidence not incriminating as to him will be introduced to incriminate other defendants. See United States v. DiPasquale, 740 F.2d 1282, 1293-94 (3d Cir. 1984), cert. denied, 469 U.S. 1228, 105 S. Ct. 1226, 84 L. Ed. 2d 364 (1985). A defendant may not simply suggest he will be prejudiced by a joint trial; nor is it sufficient for him to point out the Government's evidence against him is weaker than it is against one or more of his co-defendants. See, e.g., DePeri, 778 F.2d at 984; United States v. Dansker, 537 F.2d 40, 62 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 97 S. Ct. 732, 50 L. Ed. 2d 748 (1977). Rather, the defendant must demonstrate that in light of the evidence to be submitted against him, the evidence in the case as a whole is so complex or confusing, that a reasonable jury would be unable to "compartmentalize" the evidence as to each defendant and would thus be unable to make an individualized determination of the prejudiced defendant's innocence or guilt. See, e.g., United States v. Bright, 630 F.2d 804, 813 (5th Cir. 1980); United States v. DeLarosa, 450 F.2d 1057, 1065 (3d Cir. 1971), cert. denied, 405 U.S. 927, 92 S. Ct. 978, 30 L. Ed. 2d 800 (1972). Discretion over such motions rests with the district court. See United States v. Boyd, 595 F.2d 120, 125 (3d Cir. 1978).
The charges contained in the indictment allege various specific instances of unlawful activity. Certain of the defendants are charged with conspiring to use deceptive means in connection with the purchase and sale of Laser Arms stock. The same defendants are charged with actually using deceptive means in connection with the purchase and sale of Laser Arms stock. Bernick and Zolp are charged with submitting a fraudulent Laser Arms application to the NQB and with causing to be transported in interstate commerce stolen or fraudulently obtained money. Certain other defendants are charged with conspiring to obstruct justice once the SEC's civil investigation into Laser Arms had commenced in April, 1986 in the Southern District of New York. Finally, certain of the defendants are charged with devising a scheme during a telephone conference call, conducted on May 12, 1986, to defraud investors in Laser Arms out of certain funds. That the various defendants are charged with unlawful acts which took place during distinct time periods supports the Government's assertion the jury will be able to compartmentalize the evidence presented at trial. See United States v. Sebetich, 776 F.2d 412, 427 (3d Cir. 1985).
Having carefully reviewed the indictment and the arguments raised by defendants, I see no basis for finding that a jury, given appropriate instructions from the court, would be unable to "compartmentalize" the evidence with respect to each defendant on each charge to arrive at individualized determinations of guilt or innocence. Livieratos is named only in the first two counts. I see no reasonable basis for believing a jury would be unable to keep his alleged involvement in the scheme limited to the events and circumstances set forth in those two counts. Similarly, Bernick is named in each of the first four counts of the indictment and need not fear implication in the subsequently occurring events giving rise to the fifth and sixth counts. Conversely, Baker, Castellano and Berger are named only in the fifth and sixth counts and thus a jury, properly instructed, will readily be able to keep its focus on them limited to the events described in those counts.
Boose is charged only in the first two counts with participating as a stock broker in the conspiracy to use, and the use of, deceptive means in connection with the purchase and sale of Laser Arms stock. A jury will readily be able to keep its focus on his involvement in the case limited to those charges. Finally, Quinn is named only as a participant in the conspiracy to obstruct justice count, apparently in connection with his giving false information to an SEC official. Although his participation in the overall scheme of the case does not appear in the indictment to be extensive, I do not believe a jury would be unable to keep his limited participation in mind when deliberating his guilt or innocence on the conspiracy to obstruct justice charge. Quinn's speculation that he may be prejudiced by not being able to call a co-defendant, Lorenzo Formato, as an exculpatory witness, provides no basis for granting his request to be severed from this trial. Quinn has made no showing Formato might testify on Quinn's behalf or that such testimony might prove exculpatory. See United States v. Dickens, 695 F.2d 765, 779 n. 19 (3d Cir. 1982), cert. denied, 460 U.S. 1092, 103 S. Ct. 1792, 76 L. Ed. 2d 359 (1983); see also United States v. Gorecki, 813 F.2d 40, 43 (3d Cir. 1987) ("bare allegation [of prejudice] without a specific showing as to what that testimony may have been, fails to meet the stringent requirements for a Rule 14 showing of prejudice").
This case does not present a situation such as existed in Kotteakos v. United States, 328 U.S. 750, 90 L. Ed. 1557, 66 S. Ct. 1239 (1946). In that case the Government obtained convictions of several of thirty-two defendants named in an indictment which alleged a single general conspiracy. The Government admitted, however, its evidence at trial proved "some eight or more different" conspiracies, interconnected by one key individual. The Supreme Court overturned the appellate court's finding of harmless error in the convictions, noting that an erroneous jury charge and the complexity of the case, may well have confused the jury. The Court stated:
We do not think that either Congress . . . or this Court . . . intended to authorize the Government to string together, for common trial, eight or more separate and distinct crimes, conspiracies related in kind though they might be, when the only nexus among them lies in the fact that one man participated in all.
Id. at 773. The case at bar falls far short of the factual complexity of Kotteakos, and is not tainted by an imprecise indictment as existed in Kotteakos. Accordingly, the Rule 14 motions for severance are denied.
Counsel for Berger has also argued vigorously on behalf of his client for severance under Rule 8 (b) of the Federal Rules of Criminal Procedure.
That Rule provides:
Two or more defendants may be charged in the same indictment or information if they are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses. Such defendants may be charged in one or more counts together or separately and all of the defendants need not be charged in each count.
Berger urges counts five and six, the only counts in which he is named as a defendant, charge offenses distinct from those charged in counts one through four. Berger further asserts the offenses contained in counts five and six cannot fairly be said to comprise offenses part of a series of acts or transactions constituting an offense or offenses. Accordingly, in contrast to the Rule 14 motions for severance in which the trial court's discretion is involved, Berger argues severance under Rule 8 is mandated as a legal matter. The Government opposes this motion, asserting the allegations contained in counts five and six relate directly to the allegations contained in the prior counts. The Government asserts counts five and six, in which the defendants charged therein are alleged to have participated in efforts to conceal and obtain monies obtained from the underlying securities fraud, must be recognized as elements of one overall scheme.
I am satisfied the charges contained in counts five and six of this indictment are sufficiently related to those charged in counts one through four such that their joinder in a single indictment does not constitute misjoinder. While it is true that the offense of conspiracy to obstruct justice and the offense of wire fraud -- in and of themselves -- cannot be seen as equivalent to the alleged securities fraud offenses, I am persuaded in the case at bar the offenses are sufficiently related such that they may be considered as elements in a "series of acts or transactions constituting an offense" as required by Rule 8 (b). Counts one through four address various aspects of the unlawful taking of monies generated by means of a stock fraud scheme. Counts five and six encompass the intimately related and ultimately inevitable actions taken to conceal and dispose of the fraudulently obtained money. To find that the charges contained in counts five and six are not part of a series of events initially involving the actions charged in counts one through four, would restrict the meaning and intent behind Rule 8 (b) to an unreasonable degree.
Other courts have ruled similarly in analogous contexts. See, e.g., United States v. Johnson, 763 F.2d 773, 775-76 (6th Cir.), cert. denied, 474 U.S. 862, 106 S. Ct. 178, 88 L. Ed. 2d 148 (in multi-defendant case involving transportation of stolen vehicles, no Rule 8 (b) misjoinder where one defendant was charged only with one count of mail fraud because "the mail fraud was logically interrelated with the other acts charged in the indictment"); United States v. Perry, 235 U.S. App. D.C. 283, 731 F.2d 985, 989-92 (D.C. Cir. 1984) (no Rule 8 (b) misjoinder where only one of two defendants in drug dealing case was charged in one of the counts of the indictment because of the "logical relationship between the acts or transactions within the series"); United States v. Carmichael, 685 F.2d 903, 909-10 (4th Cir. 1982), cert. denied, 459 U.S. 1202, 75 L. Ed. 2d 434, 103 S. Ct. 1187 (1983) (co-defendants charged with election fraud and subsequent obstruction of justice charges properly joined in indictment because "'transaction' is a flexible term implying a connection of logical relationship rather than immediateness"); United States v. Ford, 632 F.2d 1354, 1371-73 (9th Cir. 1980), cert. denied, 450 U.S. 934, 101 S. Ct. 1399, 67 L. Ed. 2d 369 (1981) (where two counts of fifteen count indictment charging trustees with pension fund fraud alleged conduct distinct from previous counts, defendants were properly joined because of logical relationship "shown by existence of a common scheme, plan or conspiracy" even though the plan, scheme or conspiracy was not charged on face of indictment); United States v. Rogers, 636 F. Supp. 237, 242-44 (D. Colo. 1986) (no Rule 8 (b) misjoinder in indictment charging various defendants with mail, tax and securities fraud and with obstruction of justice because "the mail fraud offenses . . . and the obstruction of justice charges . . . are inextricably related to the common plan to defraud").
Contrary to Berger's arguments, United States v. Bledsoe, 674 F.2d 647 (8th Cir.), cert. denied, 459 U.S. 1040, 103 S. Ct. 456, 74 L. Ed. 2d 608 (1982), does not compel severance. That case initially involved a single indictment variously charging twenty-two defendants with one or more violations of law as contained in 175 counts. One of the principal defendants, Phillips, was charged in two of the indictment's counts with two instances of securities fraud. Those charges were completely unrelated to any of the numerous other fraud charges contained in the indictment and did not involve any of the other defendants in the indictment. Noting that the two securities fraud counts "stand remarkably alone" and "singularly allege distinct acts involving only Phillips," id. at 656, the Eighth Circuit declared the other defendants had been improperly joined with Phillips and vacated their convictions. Id. at 657. In the case at bar, unlike in Bledsoe, the two counts under attack are intimately related to the prior counts charging securities fraud. Thus, Bledsoe does not compel a declaration of misjoinder in this case.
Finally, it bears mentioning that at oral argument the Government asserted even if Berger and the defendants named in counts five and six were severed from the case in chief, the Government would introduce at the subsequent trial evidence of the underlying Laser Arms securities fraud and Berger's prior representation of Zolp and Laser Arms, presumably to provide an explanation and context for the events charged as unlawful in counts five and six. (Transcript, 3/25/87 at 31, 35.) Because the allegedly prejudicial evidence would be introduced, even in a severed trial, the Government asserts the underlying justification for a Rule 8 (b) severance is undermined. Certain other courts have favorably received this argument in denying Rule 8 (b) severance motions. See, e.g., Perry, 731 F.2d at 991-92; Carmichael, 685 F.2d at 910. Although this point does not form the basis for my denial of the Rule 8 (b) severance motion, it adds weight to an already sufficient case against severance.
Representations made in the Government's brief and at oral argument indicate that the Government is fully aware of its obligations under the Jencks Act, 18 U.S.C. § 3500, Brady v. Maryland, 373 U.S. 83, 10 L. Ed. 2d 215, 83 S. Ct. 1194 (1963), and governing case law to make discoverable material available to the defendants with sufficient time so the defendants will be able to prepare effectively for trial. As of this date, it appears the Government has provided the defendants with tapes of wiretapped calls and supporting and accompanying documentation, documentation relating to the executed search warrants, arrest reports and post-arrest statements. The Government has promised to disclose the defendants' criminal history records as they become available. The Government claims it has not obtained exculpatory evidence such as must be revealed under Brady, and pledges it will disclose such evidence if and when it surfaces. Furthermore, the Government has agreed to turn over Jencks Act material seven days prior to the commencement of trial and to retain any rough notes and drafts taken and prepared by investigating officers and agents.
Finally, the Government has pledged to make available materials bearing on the credibility of witnesses, as well as to give notice of its intention to introduce "prior crimes" evidence against defendants, in time so that the defendants will be able to prepare their defenses.
The Government's position on each of these points is reasonable under the Jencks Act and the Brady doctrine and is amply supported by the case law. See, e.g., Palermo v. United States, 360 U.S. 343, 350, 3 L. Ed. 2d 1287, 79 S. Ct. 1217 (1959) ("One of the most important motive forces behind the enactment of this legislation was the fear that an expansive reading of Jencks would compel the undiscriminating production of agent's summaries of interviews regardless of their character or completeness.") United States v. Higgs, 713 F.2d 39, 44 (3d Cir. 1983), cert. denied, 464 U.S. 1048, 104 S. Ct. 725, 79 L. Ed. 2d 185 (1984) (evidence going to credibility of Government's witness may be disclosed on day witness testifies); United States v. Murphy, 569 F.2d 771, 773 (3d Cir.), cert. denied, 435 U.S. 955, 55 L. Ed. 2d 807, 98 S. Ct. 1588 (1978) (Jencks Act material need not be disclosed until witness testifies at trial); United States v. Miller, 520 F.2d 1208, 1211 (9th Cir. 1975) (Government need not disclose prior to opening statement evidence of defendant having committed prior similar criminal acts). To the extent defendants seek disclosure of these types of material well in advance of the time the Government has offered to make the evidence available, the motions are denied.
Certain of the defendants seek a list of the Government's actual or potential trial witnesses. The Third Circuit does not require that the Government divulge its trial witnesses and defendants herein have presented no compelling justification for departing from this settled principle. See DiPasquale, 740 F.2d at 1294; United States v. Mitchell, 540 F.2d 1163, 1166 (3d Cir. 1976), cert. denied, 429 U.S. 1099, 51 L. Ed. 2d 547, 97 S. Ct. 1119 (1977); United States v. Zirpolo, 288 F. Supp. 993, 1019 (D.N.J. 1968), rev'd on other grounds, 450 F.2d 424 (3d Cir. 1971). Accordingly, the motions for disclosure of trial witnesses are denied.
2. Disclosure of Informant
Certain defendants seek to have the Government disclose the identity of its confidential informant whose information was instrumental in aiding the Government in obtaining authorization for the wiretaps and search warrants in this case. Quinn points out that because the informant was evidently present in the ITM offices and in other locations at the same time as certain of the defendants, and may have been personally involved in the unlawful activities charged in the indictment, his testimony could prove beneficial to the defendants. Baker suggests an interview with the informant might provide grounds for asserting an entrapment defense or might cast some doubt on whether Baker knowingly participated in the activities charged in the indictment.
As described in Roviaro v. United States, 353 U.S. 53, 59, 1 L. Ed. 2d 639, 77 S. Ct. 623 (1957) (citations omitted):
. . . the informer's privilege is in reality the Government's privilege to withhold from disclosure the identity of persons who furnish information of violations of law to officers charged with enforcement of that law. . . . The purpose of the privilege is the furtherance and protection of the public interest in effective law enforcement. The privilege recognizes the obligation of citizens to communicate their knowledge of the commission of crimes to law-enforcement officials and, by preserving their anonymity, encourages them to perform that obligation.
Whether a court should uphold the Government's assertion of the privilege in the face of a defense request for disclosure, requires a balancing of this public interest with the individual defendant's need for disclosure. The court must consider the circumstances of the case, including the crime charged, possible defenses, and the significance of the informant's likely testimony. Id. at 62.
The defendant bears the burden of demonstrating his need to know the identity of a confidential Government informer. See United States v. Jiles, 658 F.2d 194, 197 (3d Cir. 1981), cert. denied, 455 U.S. 923, 71 L. Ed. 2d 465, 102 S. Ct. 1282 (1982); United States v. Prueitt, 540 F.2d 995, 1003-04 (9th Cir. 1976), cert. denied, 429 U.S. 1063, 97 S. Ct. 790, 50 L. Ed. 2d 780 (1977). This "burden is not met by mere speculation that identification might possibly be of some assistance." In re United States, 565 F.2d 19, 23 (2d Cir. 1977), cert. denied, 436 U.S. 962, 98 S. Ct. 3082, 57 L. Ed. 2d 1129 (1978). The defendants seeking disclosure of the informant's identity in this action have done no more than speculate that because the Government's informant was evidently in close contact with some of the defendants, his identity and testimony may be of some assistance to their defense. Such speculation fails to warrant disclosure of the identity of the informant in this case.
The facts in this case are distinct from those existing in Roviaro, in which a single defendant was convicted of a single instance of selling and transporting heroin. In that case, the informant "had taken a material part in bringing about the possession of certain drugs by the accused, had been present with the accused at the occurrence of the alleged crime, and might be a material witness as to whether the accused knowingly transported the drugs as charged." Roviaro, 353 U.S. at 55. In that case, the informant was directly and intimately involved in the single instance of criminal activity with which the single defendant was charged. Accordingly, the Supreme Court decided disclosure was warranted.
In the case at bar, by contrast, there is nothing in the record to suggest the Government's informant played so key and pivotal a role in the wrongful conduct alleged in the indictment. Thus, the informant is unlikely to provide the type of evidence that might support an entrapment defense. See Roviaro, 353 U.S. at 64. Nor is it suggested the informant in this case is somehow instrumental to the Government for purposes of identifying the defendants. See, Roviaro, 353 U.S. at 64; United States v. Ordonez, 737 F.2d 793, 807-09 (9th Cir. 1983). Accordingly, the defendants have failed to carry the burden of demonstrating a specific need to know the informant's identity and the motion is denied.
As explained by the Third Circuit, a bill of particulars is designed "to inform the defendant of the nature of the charges brought against him to adequately prepare his defense, to avoid surprise during the trial and to protect him against a second prosecution for an inadequately described offense." United States v. Addonizio, 451 F.2d 49, 63-4 (3d Cir. 1971), cert. denied, 405 U.S. 936, 30 L. Ed. 2d 812, 92 S. Ct. 949 (1972), quoting United States v. Tucker, 262 F. Supp. 305, 308 (S.D.N.Y. 1966). A request for a bill of particulars should be granted when, in the discretion of the trial court, it appears the indictment is too vague to fairly inform the defendant of the nature of the charges against him. See Addonizio, 451 F.2d at 64, quoting, United States v. Haskins, 345 F.2d 111, 114 (6th Cir. 1965). In recognition of the Government's interest in not being forced to divulge the entirety of its case prior to trial, a court need not grant a request for a bill of particulars where it would serve to provide the defendant with "a detailed disclosure of the Government's evidence prior to trial." United States v. Kilrain, 566 F.2d 979, 985 (5th Cir.), cert. denied, 439 U.S. 819, 58 L. Ed. 2d 109, 99 S. Ct. 80 (1978), quoting United States v. Perez, 489 F.2d 51, 70-71 (5th Cir. 1973), cert. denied, 417 U.S. 945, 94 S. Ct. 3067, 41 L. Ed. 2d 664 (1974). See also Addonizio, 451 F.2d at 64.
In this case Baker and Castellano seek a bill of particulars on the ground the charges contained in the indictment against them are vague and unspecific. I cannot accept this characterization of the indictment as it pertains to them. In count five Baker and Castellano, together with certain other specified defendants, are alleged to have participated in designing a scheme to falsely explain ownership of the funds contained in the EPC account in the Reliance S & L. In count six, they and certain other defendants are alleged to have participated in a telephone conference call in which plans were discussed for defrauding Laser Arms stockholders out of funds in the EPC account. As I read the allegations against Baker and Castellano, they are not so vague as to warrant a bill of particulars.
Bernick and Livieratos also claim to be unable effectively to prepare their defenses due to the vague nature of the indictment's allegations against them. Bernick seeks a bill of particulars setting forth numerous details of the government's case, including the names and addresses of co-conspirators and others referred to in the indictment, the nature of the manipulations, devices, frauds and representations referred to in the indictment and whether the indictment's various counts charge Bernick as a principal or an aider or abettor in the alleged unlawful activities. Livieratos seeks a similarly specific bill of particulars containing extensive details about the conspiracies and conspirators in which and with whom Livieratos is charged with participating.
I do not read the indictment's charges against Bernick and Livieratos to be impermissibly vague. Count one charges Bernick with participation in a conspiracy to manipulate Laser Arms stock generally, and specifically with filing with the NQB a false Laser Arms application to trade stock to the public. Counts two and three charge Bernick with participating in Laser Arms stock manipulation and mail fraud, arising out of the charges contained in count one. Count four charges Bernick and Zolp with the interstate transfer of $ 300,000.00. Similarly, count one charges Livieratos with participation in the conspiracy to manipulate Laser Arms stock generally, and specifically with participating in the press conference demonstration of the fake "self-chilling" can. Count two charges Livieratos with participating in the stock manipulation scheme itself. Having reviewed the indictment, I cannot say it fails to inform Bernick and Livieratos of "the nature of the charges brought against" them. Addonizio, 451 F.2d at 63.
Numerous courts have ruled that detailed discovery requests, such as those made by Bernick and Livieratos through their requests for a bill of particulars, need not be granted. As stated by the Third Circuit: "Appellant's request for the 'when where and how' of any overt acts not alleged in the indictment was tantamount to a request for 'wholesale discovery of the Government's evidence,' which is not the purpose of a bill of particulars under Fed. R. Crim. P. 7 (f)." United States v. Armocida, 515 F.2d 49, 54 (3d Cir.), cert. denied, 423 U.S. 858, 96 S. Ct. 111, 46 L. Ed. 2d 84 (1975), citing Addonizio, 451 F.2d at 64. Similar requests for specific facts about an alleged conspiracy sought by way of a demand for a bill of particulars were denied in United States v. Wilson, 565 F. Supp. 1416, 1438-39 (S.D. N.Y. 1983). See also United States v. Boffa, 513 F. Supp. 444, 485 (D. Del. 1980), aff'd in part, rev'd in part on other grounds, 688 F.2d 919 (3d Cir. 1982) ("nor is it necessary for the Government to disclose in a bill of particulars the precise details that a defendant and his ...