# United States v. Eisenberg

> District Court, D. New Jersey · July 26, 1991 · 773 F. Supp. 662

URL: https://www.frixlaw.com/law-library/cases/1607985

## Case

- **Full name:** UNITED STATES of America v. Leo M. EISENBERG, Richard S. Cannistraro and Richard O. Bertoli, Defendants
- **Court:** District Court, D. New Jersey
- **Decided:** July 26, 1991
- **Citations:** 773 F. Supp. 662; 1991 U.S. Dist. LEXIS 11394; 1991 WL 155206
- **Precedential status:** Published
- **Opinion:** Opinion by Lechner
- **Judges:** Lechner
- **Cited by:** 30 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/1607985

## How later opinions describe it (automated extraction)

- recognizing Third Circuit decision denying recusal of judge who had suffered losses in penny stock scam despite fact that defendant was accused of selling similar stocks

## Opinion text

OPINION
LECHNER, District Judge.
TABLE OF CONTENTS
Facts....................................................................... 672
Discussion.................................................................. 680
I. Discovery-Related and Miscellaneous Motions..................... 680
A. Motion for Statements of Co-Conspirators.................... 680
B. Motion for List of Government Witnesses .................... 683
C. Motion for
Giglio
Material................................... 684
D. Motions for Disclosure of Rule 404 Evidence the Government Intends to Admit.......................................... 685
E. Motion for Identification of
Brady
Material Among Documents Previously Produced....................................... 687
F. Motion for Production of Materials Initially Disclosed to the Defendants But Later Withdrawn.......................... 688
G. Motion for a Bill of Particulars.............................. 688
H. Motion for the Production of Enumerated Documents Characterized as
Brady
Material.................................... 692
I. Preservation of Rough Notes and Other Communications...... 692
J. Motion for Transcripts and Tape Recordings.................. 692
K. Motion for an Order Precluding the Admission of Any Testimony by David O’Connor, Esq., or Marvin Gersten, Esq., Protected by the Attorney-Client Privilege............................... 692
L. Motion for an Order Preserving the Right of Bertoli to Make Applications Under Fed.R.Crim.P. 17(c) for Subpoenas Prior to Trial...................................................... 693
M. Motion for an Order Preserving Bertoli’s Right to Move to Suppress Wiretap Evidence or Evidence Seized in Searches..... 693
II. Motion for a Change of Venue as to the Obstruction of Justice Allegations.................................................... 694
III. Motion for Severance............................................ 695
IV. Motion to Strike Surplusage...................................... 698
V. Motion to Dismiss and for Discovery Based on Allegations of Prosecutorial Misconduct.............................................. 701
A. Motions to Dismiss and for Discovery Based on Specific Allegations of Prosecutorial Misconduct........................... 702
1. Alleged Failure to Obtain Approval of RICO Charges..... 702
2. Alleged Conflict of Interest.............................. 703
3. Allegations as to Improper Sealing of the Indictments..... 706
4. Alleged Misconduct Relating to the Grand Jury Proceedings 707
a. Alleged Disclosure of Bertoli
Nolo Contendere
Plea ... 708
b. Alleged Mischaracterizations to the Grand Jury of Testimony Given Before Previous Grand Juries........... 709
c. Alleged Use of Summaries of Evidence................ 709
d. Alleged Fed.R.Crim.P. 6(e) Violations.................. 710
e. Alleged Violation of the Right to Financial Privacy Act 712
B. Motion to Dismiss and for Discovery Based on Alleged Cumulative Misconduct............................................ 713
VI. Motion to Dismiss Based on Prosecutorial Vindictiveness.......... 714
VII. Motion to Dismiss Counts 1 through 3 for Failure to State an Offense 717
*670
VIII. Motion to Dismiss Racketeering Acts 5(j) and 5(k) ................ 725
IX. Constitutional Challenge to the RICO “Pattern” Requirement...... 726
X. Motion for Recusal.............................................. 731
Conclusion......................................................'............ 735
Presently before the court are the pretrial omnibus motions of defendants Leo M. Eisenberg (“Eisenberg”), Richard S. Cannistraro (“Cannistraro”) and Richard 0. Bertoli (“Bertoli”) (collectively, the “Defendants”).
1
Bertoli moves to dismiss Counts 1 and 2 of the Superseding Indictment, which charge the Defendants with violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1962 (c) and (d), respectively, on the ground that the RICO “pattern” requirement is unconstitutionally vague.
2
In addition, Bertoli moves to dismiss Counts 1, 2 and 3, the last of which charges the Defendants with conspiracy to commit securities fraud in violation of 18 U.S.C. § 371 , for failure to state an offense. Bertoli moves to dismiss the Superseding Indictment based on alleged prosecutorial misconduct, or in the alternative, for discovery of grand jury materials.
In addition, Bertoli moves pursuant to Fed.R.Crim.P. 16 for discovery of statements made by unindicted co-conspirators, for notice pursuant to Fed.R.Crim.P. 12(d)(2) of the Government’s intention to introduce under Fed.R.Evid. 404(b) evidence of other crimes, wrongs or acts by Bertoli (“Rule 404(b) Evidence”), for a list of witnesses the Government intends to call at trial, for impeaching material with respect to Government witnesses and for exculpatory evidence under
Brady v. Maryland,
373 U.S. 83 , 83 S.Ct. 1194 , 10 L.Ed.2d 215 (1963)
(“Brady”
material). In addition, Bertoli moves for an order precluding certain testimony by David O’Con-nor, Esq., and Marvin Gersten, Esq., on the ground that it is protected by the attorney-client privilege, or in the alternative for identification by the Government of the anticipated testimony of David O’Connor, Esq., and Marvin Gersten, Esq., pursuant to Fed.R.Crim.P. 12(d)(2).
Bertoli also seeks an order preserving his right to make applications, as necessary under Fed.R.Crim.P. 17(c), for subpoenas prior to trial, an order preserving his right to move to suppress wiretap evidence or evidence seized in searches or the fruits thereof, an order striking purported surplusage from the Superseding Indictment, an order compelling the Government to identify the
Brady
material contained among documents it has thus far produced, an order compelling the Government to preserve notes of its interviews of Bertoli and an order compelling the Government to
*671
produce for inspection and copying materials previously produced by the Government but later withdrawn by the Government. Bertoli also moves for a Bill of Particulars pursuant to Fed.R.Crim.P. 7(f).
Defendant Eisenberg moves for severance of his trial from that of Cannistraro, for transfer of the charges of obstruction of justice, set forth in Counts 4, 5 and 6 of the Superseding Indictment, to the Eastern District of New York and for pre-trial disclosure of all Rule 404(b) Evidence. Defendant Cannistraro moves to dismiss the Superseding Indictment against him as violative of his due process right to be free from vindictive prosecution and for recusal of the court pursuant to 28 U.S.C. § 455 .
3
By letter, dated 19 March 1991, Eisenberg joined in Bertoli’s motions to dismiss portions of the Superseding Indictment and his motions relating to discovery
4
and for a Bill of Particulars.
See
19 March 1991 Eisenberg Letter.
5
Counsel for Eisenberg reiterated at oral argument, held 3 July 1991, that Eisenberg joined in only Bertoli’s motions to dismiss, for discovery and for a Bill of Particulars. 3 July 1991 Tr. at 13. By letter, dated 3 April 1991, Bertoli joined in Cannistraro’s recusal motion and Eisenberg’s severance motion.
See
3 April 1991 Bertoli Letter.
6
*672
Facts
On 16 June 1989, an Indictment was returned against the Defendants and sealed by order of Magistrate Judge Stanley R. Chesler. Government Brief at 3 n. 1. On 29 September 1989, the instant six-count Superseding Indictment
7
was returned against the Defendants and sealed by Magistrate Judge Chesler.
8
It was unsealed on
*673
5 October 1989. Count 1 of the Superseding Indictment charges the Defendants with racketeering activities involving Monarch Funding Corporation (“Monarch”) in violation of RICO, 18 U.S.C. § 1962 (c). Count 2 charges the Defendants with conspiracy to commit racketeering in violation of RICO, 18 U.S.C. § 1962 (d). Count 3 charges the Defendants with conspiracy in violation of 18 U.S.C. § 371 to commit securities fraud in violation of section 10(b) of the Securities Exchange Act of 1934 (“Section 10(b)”), 15 U.S.C. § 78j(b) and Securities and Exchange Commission (“SEC”) Rule 10b-5 promulgated thereunder (“Rule 10b-5”), 17 C.F.R. § 240 .10b-5. Counts 4 through 6 charge Eisenberg alone with obstruction of justice in violation of 18 U.S.C. § 1503 .
As to Count 1, the Superseding Indictment states Monarch, the enterprise, was a securities brokerage firm which was engaged in the business of underwriting, purchasing and selling securities primarily traded in the over-the-counter markets. Superseding Indictment, Count 1, ¶ 1. It is stated in Count 1 that Eisenberg was the owner and president of Monarch and, as such, directed the trading of securities in Monarch’s own brokerage account (the “Monarch Trading Account”).
Id.,
¶ 2 . It is stated Cannistraro was a securities research analyst with Wood Gundy, Inc. (“Wood Gundy”), a brokerage firm located in New York City, New York.
Id.,
¶ 3 . It is stated Bertoli was the former president of a brokerage firm not named in the Superseding Indictment and controlled and had a beneficial interest in several brokerage accounts maintained at Monarch.
Id.,
114 . The pattern of racketeering engaged in by the Defendants is described as consisting of predicate acts of mail fraud, wire
*674
fraud, interstate transportation of money taken by fraud, securities fraud and obstruction of justice.
Id.,
¶ 9 .
Count 1 charges that from about January 1982 to at least January 1989, in the District of New Jersey and elsewhere, the Defendants participated in the affairs of Monarch through a pattern of racketeering activity, the object of which was to “use Monarch as a vehicle to engage in fraudulent securities trading practices and thereby obtain money and other things of value for the [Defendants____”
Id.,
TUI 6-7. It is stated in Count 1 that the Defendants perpetrated such racketeering activity by maintaining accounts in which they had a beneficial interest and which were in the names of other persons or entities (“Nominee Brokerage Accounts”).
Id.,
118 (a). It is stated that the Nominee Brokerage Accounts enabled the Defendants to surreptitiously engage in securities trading for their own personal benefit.
Id.
In addition, the Defendants are charged with engaging in such racketeering activity by preparing and distributing false and misleading research reports recommending the purchase of the securities of Astrosystems, Inc. (“Astrosystems”), Nature’s Bounty, Inc. (“Nature’s Bounty”), Liquidation Control, Inc. (“LCI”), Toxic Waste Containment, Inc. (“Toxic Waste”), High Technology Capital Corp. (“High Tech”) and Solar Age Manufacturing Corp. (“Solar Age”).
Id.,
118 (b).
It is further stated in Count 1 that the Defendants engaged in such racketeering activity by bribing the portfolio manager of the M & I Growth Fund (the “M & I Fund”), a trust fund, the portfolio manager of Aggressive Growth Shares, Inc. (the “Bullock Fund”), an investment company and mutual fund and the research analyst of Hallswell Corp. (“Hallswell”), a corporation which purchases and sells over-the-counter securities.
Id.,
¶ 8 (c). It is stated Cannistraro and Eisenberg opened Nominee Brokerage Accounts at Monarch for the benefit of the M & I Fund and Bullock Fund portfolio managers and the Hallswell research analyst. These Nominee Brokerage Accounts “generate[d] large sums of money ... through the fraudulent trading of LCI and Toxic Waste securities.”
Id.
in exchange for such trading, the portfolio managers of the M
&
I Fund and Bullock Fund and the research analyst of Hallswell caused the M & I Fund and Bullock Fund and Hallswell to purchase large blocks of LCI, Toxic Waste and High Tech securities.
Id.
In addition, it is stated in Count 1 that the racketeering activity of the Defendants included non-disclosure of their interest in High Tech in order to enable them to raise capital for that company, control its management and policies and profit on the sale of its securities.
Id.,
¶ 8 (d). Finally, it is stated that Cannistraro paid a witness in grand jury proceedings to conceal Cannistraro’s interest in a Nominee Brokerage Account at Monarch and Eisenberg secreted thousands of Monarch documents which were required to be produced pursuant to a grand jury subpoena.
Id.,
¶¶18 (e)-(f).
Count 1 charges the Defendants with engaging in racketeering activity through the execution of seven separate schemes. As to the first scheme (the “Astrosystems Scheme”), it is stated in Count 1 that between approximately October 1982 and approximately August 1983, in the District of New Jersey and elsewhere, the Defendants established Nominee Brokerage Accounts at Monarch and elsewhere to purchase Astrosystems securities from the investing public with the knowledge that favorable research reports were to be prepared by Cannistraro and disseminated by Wood Gundy to the investing public.
Id.,
1111 . Count 1 identifies three such reports. It is charged the reports were misleading in that they did not disclose that the Defendants “had purchased Astrosystems securities based upon advance knowledge of the reports, and intended to profit on the sale of these securities once the dissemination of the reports had caused the price of Astrosystems securities to rise.”
Id.,
¶1¶ 12-13.
Count 1 also states that as part of the Astrosystems Scheme, an article recommending the purchase of Astrosystems securities was prepared by Cannistraro and disseminated to the investing public in an
*675
industry newsletter, “Portfolio Letter,” dated 14 March 1983 (the “14 March 1983 Portfolio Letter”).
Id.,
¶ 14 . It states this article did not disclose the scheme to defraud.
Id.
Count 1 further states the Defendants sold their Astrosystems securities without disclosing the scheme to defraud and obtained profits totalling at least $138,000 from such sale.
Id.,
II15.
Count 1 identifies by date and content six instances of mail fraud in violation of 18 U.S.C. § 1341 , two instances of wire fraud in violation of 18 U.S.C. § 1343 and one instance of securities fraud in violation Section 10(b) and Rule 10b-5, all perpetrated by the Defendants in executing the Astrosystems Scheme.
Id.,
¶¶ 16-18 .
With respect to the second scheme (the “Nature’s Bounty Scheme”), Count 1 states that from approximately December 1982 to approximately March 1983 the Defendants engaged in a scheme involving the securities of Nature’s Bounty.
Id.,
¶¶ 19-20 . It states that in or about January 1983, the Defendants used nominee and other brokerage accounts at Monarch and elsewhere, including the Monarch Trading Account, to purchase Nature’s Bounty securities from the investing public “with the knowledge that favorable research reports were to be prepared by [Cannistraro] and disseminated by Wood Gundy to the investing public, and with the expectation that the reports would cause the price of Nature’s Bounty securities to rise.”
Id.,
¶ 20 . Count 1 identifies such reports and states they were false and misleading in that they “failed to disclose, among other things, that the [Defendants had purchased Nature’s Bounty securities based upon advance knowledge of the reports and intended to profit on the sale of these securities once the dissemination or anticipated dissemination of the reports had caused the price of Nature’s Bounty securities to rise.”
Id.,
If 22.
It alleges the Defendants sold their Nature’s Bounty securities “to the investing public without disclosing the scheme to defraud, and thereby fraudulently obtained profits totalling at least $220,000.”
Id.,
¶ 23 . It identifies by date and content five instances of mail fraud, three instances of wire fraud and one instance of securities fraud in violation of Section 10(b) and Rule 10b-5, all perpetrated by the Defendants in executing the Nature’s Bounty Scheme.
Id.,
¶¶ 24-26 .
As to the third scheme (the “LCI Scheme”), Count 1 states that between approximately October 1982 and approximately November 1983, the Defendants engaged in a scheme concerning the securities of LCI. It alleges that in or about November and December 1982, the Defendants used nominee and other brokerage accounts at Monarch to purchase “substantial amounts of LCI securities at minimal cost during LCI’s initial public offering and during the first few days of public trading.”
Id.,
¶ 28 . It states: “These purchases were made with the expectation that the price of LCI securities would rise as a result of, among other things, the issuance of a favorable research report to be prepared by [Cannistraro] but disseminated to the investing public as [the report of] G.K. Scott[, Inc.] [(“G.K. Scott”), a brokerage firm] ..., and the bribery of individuals to cause the purchase of large blocks of LCI securities.”
Id.,
¶ 28 .
Count 1 states Eisenberg and Cannistraro opened Nominee Brokerage Accounts at Monarch for the benefit of the M & I Fund and Bullock Fund portfolio managers and the Hallswell research analyst and “used these nominee accounts to generate large sums of money for the [portfolio managers] and the [research analyst] through the fraudulent trading of LCI and Toxic Waste securities.”
Id.,
II29. It states: “In exchange the M & I [Fund] and Bullock [Fund portfolio managers] caused their respective funds to purchase large blocks of LCI securities, and the [Hallswell research analyst] caused Hallswell to open a brokerage account at Monarch that purchased a large block of LCI securities.”
Id.
Count 1 further states Cannistraro prepared a report which was disseminated to the investing public on G.K. Scott letterhead.
Id.,
¶ 30 . It states this report recommended the purchase of LCI securities (the “LCI Report”) in order to artificially
*676
inflate the price of such securities.
Id.,
¶ 30 . It states the LCI Report was false and misleading because it did not disclose that it was actually prepared by Cannistraro, that the Defendants purchased LCI securities based on advance knowledge of the dissemination of such report and that individuals had been bribed to cause the purchase of large amounts of LCI securities.
Id.,
1131 .
Count 1 states the Defendants sold their LCI securities to the investing public “without disclosing the scheme to defraud, and thereby fraudulently obtained profits total-ling at least $690,000.”
Id.,
II32. Count 1 identifies by date and content six instances of mail fraud, five instances of wire fraud and one instance of securities fraud in violation of Section 10(b) and Rule 10b-5, all perpetrated by the Defendants in executing the LCI Scheme.
Id.,
111133-35 .
As to the fourth scheme (the “Toxic Waste Scheme”), Count 1 states that between approximately December 1982 and approximately October 1983, the Defendants engaged in a scheme concerning Toxic Waste securities. It states that in approximately February and March 1983, the Defendants used nominee and other accounts at Monarch and elsewhere “to purchase substantial amounts of Toxic Waste securities at minimal cost during Toxic Waste’s initial public offering and during the first few days of public trading.”
Id.,
1137 . It further states that the “purchases were made with the expectation that the price of Toxic Waste securities would rise as a result of, among other things, the dissemination to the investing public of favorable Wood Gundy research reports to be prepared by [Cannistraro] and the bribery of individuals to cause the purchase of large blocks of Toxic Waste securities.”
Id.
It states that as part of the Toxic Waste Scheme, Eisenberg and Cannistraro used these nominee accounts to “generate large sums of money and securities for the [M & I Fund and Bullock Fund portfolio managers] through the trading of Toxic Waste securities.”
Id.,
1138 .
In addition, Count 1 states that as part of the Toxic Waste Scheme, Cannistraro caused Wood Gundy to disseminate to the investing public certain research reports recommending the purchase of Toxic Waste securities.
Id.,
1140 . Count 1 identifies these reports by content and date, one of which it identifies as a five-page “Basic Report,” dated 17 March 1983 (the “Basic Report”).
Id.,
II40. It states these reports were false and misleading in that they did not disclose that the Defendants had purchased Toxic Waste securities based on advance knowledge of the content and dissemination of the reports and that individuals had been bribed to cause the purchase of large amounts of Toxic Waste securities.
Id.,
¶¶ 40-41 .
In addition, Count 1 states Eisenberg caused over 18,000 copies of the Basic Report, which recommended the purchase of Toxic Waste securities, to be disseminated to brokers, research analysts, securities newsletter publishers, Monarch customers and others throughout the United States.
Id.,
1142 . It also states that in approximately March and April 1983, Cannistraro caused to be prepared and disseminated to the investing public articles in the 14 March 1983 Portfolio Letter and in the 22 April 1983 edition of “Ground Floor,” a securities investment newsletter.
Id.,
II43. It states these articles recommended the purchase of Toxic Waste securities without disclosing the scheme to defraud.
Id.
Count 1 states that from about March 1983 to about October 1983, the Defendants and others sold their Toxic Waste securities to the investing public without disclosing their scheme to defraud for a profit of $4,400,000.
Id.,
¶ 44 . It identifies by date and content eleven instances of mail fraud, two instances of wire fraud, one instance of interstate transportation of money taken by fraud in violation of 18 U.S.C. § 2314 and one instance of securities fraud in violation of Section 10(b) and Rule 10b-5, all perpetrated by the Defendants in executing the Toxic Waste Scheme.
Id.,
¶¶ 45-48 .
As to the fifth scheme (the “Beneficial Owners Concealment Scheme”), Count 1 states that from about March 1983 to about November 1984, in the District of New
*677
Jersey and elsewhere, the Defendants executed a scheme to conceal the identities of the promoter and beneficial owners of High Tech.
Id.,
¶ 49 . It states that in about March 1983, Bertoli became the promoter of High Tech, founding High Tech, appointing its officers, board of directors and advisory board, allocating the distribution of its securities and arranging for the initial public offering of its securities, which were underwritten by Monarch.
Id.,
¶ 50 .
Count 1 further states that prior to the public offering of the High Tech securities, the Defendants caused 3.1 million shares of High Tech common stock to be placed in the names of nominees while the shares were beneficially owned by the Defendants.
Id.,
¶ 51 . It states the Defendants did not disclose in High Tech’s registration statements and prospectus the role of Bertoli as High Tech’s promoter and the Defendants’ beneficial ownership of more than 10% of High Tech’s common stock and more than 10% of High Tech’s outstanding stock.
Id.,
¶ 52 .
Count 1 states that having concealed such information, the Defendants raised $425,000 in capital for High Tech from the investing public.
Id.,
¶ 53 . In addition, it states that from approximately February 1984 to approximately July 1984, the Defendants caused 3.1 million shares of High Tech common stock beneficially owned by them to be sold for a profit of at least $115,000.
Id.,
¶ 54 . It identifies by content and date six instances of mail fraud, three instances of wire fraud and two instances of securities fraud in violation of 15 U.S.C. §§ 77g, 77x, 77aa(4), 77aa(6) and 77j(a)(l), all perpetrated by the Defendants in executing the Beneficial Owners Concealment Scheme. Id., ¶1¶ 55-58.
As to the sixth scheme (the “High Tech Scheme”), Count 1 states the Defendants engaged in a scheme concerning High Tech securities from about March 1983 to about February 1984, in the District of New Jersey and elsewhere. It states that the Defendants used nominee and other brokerage accounts at Monarch and elsewhere to purchase High Tech securities at minimal cost during its initial public offering and during the first few days of public trading. Id., 11 61. It states: “These purchases were made with the expectation that the price of High Tech securities would rise as a result of, among other things, the bribery of individuals to cause the purchase of large blocks of High Tech securities, and the transfer of 200,000 shares of Solar Age common stock to High Tech.” Id.
Count 1 states Eisenberg and Cannistraro allocated securities available as part of the High Tech initial public offering to the Nominee Brokerage Account of the Halls-well research analyst at Monarch. Id., ¶ 62. In exchange for such allocation, and in exchange for money which Eisenberg and Cannistraro provided to the Hallswell research analyst through their trading of LCI and Toxic Waste securities in the Hallswell nominee accounts at Monarch, the Hallswell research analyst caused Hallswell to purchase a large block of High Tech securities.
Id.
Count 1 states Eisenberg and Cannistraro entered into a similar arrangement with the M & I Fund portfolio manager, who agreed on similar terms to cause the M & I Fund to purchase a large block of High Tech securities under similar conditions.
Id.,
¶ 63.
In addition, Count 1 states Bertoli and Cannistraro agreed with the president and vice president of Solar Age that in exchange for the transfer of 200,000 shares of Solar Age common stock to High Tech, Cannistraro would prepare a favorable research report recommending the purchase of Solar Age securities.
Id.,
1164. It states that in fact, Cannistraro prepared three such reports for dissemination by Wood Gundy and identifies such reports by date.
Id.,
¶ 65. It states such reports were disseminated by Wood Gundy to the investing public and were false and misleading in that they failed to disclose that the reports were prepared in exchange for the transfer of 200,000 shares of Solar Age stock to High Tech and that they were prepared in order to increase the value of High Tech’s. portfolio of securities.
Id.,
1166.
Count 1 states that as a result of the dissemination of such reports, the price of
*678
Solar Age securities was artificially inflated and the transfer of Solar Age securities to High Tech thereby artificially increased the value of High Tech’s portfolio.
Id.,
If 67. It states the fraudulently inflated value of High Tech securities was then publicized to the investing public in various newsletters and letters from High Tech.
Id.
Count 1 states that from about June 1983 to about February 1984, the Defendants sold their High Tech securities to the investing public without disclosing the scheme to defraud for a profit of at least $1,300,000.
Id.,
1168. It identifies by date and content nine instances of mail fraud, three instances of wire fraud and one instance of securities fraud in violation of Section 10(b) and Rule 10b-5, all perpetrated by the Defendants in executing the High Tech Scheme.
As to the seventh and last scheme (the “Cover-Up Scheme”), Count 1 asserts Eisenberg and Cannistraro obstructed justice to conceal their wrongdoing. It states that a subpoena of a grand jury empaneled in the District of New Jersey was served on Monarch on 25 August 1985 requiring it to produce documents and to produce a records custodian to testify before the grand jury on 9 September 1985.
Id.,
111172-73. It states that at Eisenberg’s direction, Monarch’s corporate counsel misrepresented to the Office of the United States Attorney for the District of New Jersey that the documents responsive to the subpoena had previously been sent to the Chicago Strike Force of the Organized Crime and Racketeering Section of the United States Department of Justice (the “Chicago Strike Force”).
Id.,
¶ 74.
In addition, Count 1 states that a subpoena of a grand jury empaneled in the District of New Jersey was served on Monarch on 14 July 1988 requiring it to produce documents and to produce a records custodian to testify before the grand jury on 2 August 1988.
Id.,
1177. It states Eisenberg misrepresented in a letter to the Office of the United States Attorney that certain of the documents responsive to the grand jury subpoena were previously sent by Monarch to the Chicago Strike Force in response to other grand jury subpoenas.
Id.,
II78. It states that in fact, Eisenberg had removed these documents from Monarch’s offices and secreted them in a bakery in Brooklyn, New York (the “Brooklyn Bakery”).
Id.
Count 1 also states that on about 26 August 1987 the Office of the United States Attorney for the District of New Jersey served a subpoena
duces tecum
on Monarch, requiring it to produce documents on or before 9 September 1987 relative to the then upcoming trial of Cannistraro for the 1987 Indictment. The subpoena also required Monarch to produce a records custodian to testify at the trial of Cannistraro, scheduled to commence 24 September 1987.
9
Id.,
111181-83. In addition, an order was entered by the United States District Court for the District of New Jersey on 10 September 1987 requiring Monarch to produce the documents responsive to the subpoena by 5:00 p.m. on 11 September 1987.
Id.,
1183.
Count 1 states that at the direction of Eisenberg, Monarch’s records custodian and corporate counsel misrepresented to the Federal Bureau of Investigation (the “FBI”) and to the Office of the United States Attorney that the documents Monarch was required to produce were previously sent to the Chicago Strike Force in response to other grand jury subpoenas.
Id.,
11 85. Count 1 states that in fact, the responsive documents not produced by Monarch were hidden at the Brooklyn Bakery.
Id.
Finally, Count 1 states a subpoena of a grand jury empaneled in the District of New Jersey was served on one- of Cannistraro’s nominees on or about 24 January 1986, requiring the nominee to produce documents and to testify before the grand jury.
Id.,
¶ 88. It states Cannistraro instructed and directed this nominee in return for cash payments to conceal Cannistraro’s beneficial ownership in the nominee’s Monarch account.
Id.,
1189.
*679
Count 2 of the Superseding Indictment charges the Defendants with conspiracy to violate RICO section 1962(c) by agreeing to conduct the affairs of Monarch through a pattern of racketeering in violation of RICO section 1962(d). It charges the conspiracy existed from about January 1982 to at least about January 1989 in the District of New Jersey and elsewhere. Superseding Indictment, Count 2, ¶ 2. It lists seventeen overt acts perpetrated by the Defendants in furtherance of their conspiracy, including their meeting on 17 May 1983 with the president of G.K. Scott and other G.K. Scott personnel to discuss the purchase of a “large block of the securities of a public corporation in exchange for a favorable Wood Gundy research report by Cannistraro,” overt act number 1, false and misleading testimony by Eisenberg to the SEC on 26 March 1984 and 9 August 1984, overt act numbers 2 and 3, and 1987 and 1988 deliveries by Eisenberg of several boxes and file cabinets containing Monarch documents to the Brooklyn Bakery, overt act numbers 15 and 16.
Count 3 charges the Defendants with conspiracy in violation of 18 U.S.C. § 371 to violate Section 10(b) and Rule 10b-5 in connection with the purchase and sale of Solar Age securities. Superseding Indictment, Count 3, ¶ 2. Count 3 states the conspiracy existed between about May 1983 and about October 1985 in the District of New Jersey and elsewhere.
Id.
It states that as part of this conspiracy, Bertoli and Cannistraro agreed with the president and vice president of Solar Age that in exchange for the transfer of 200,000 shares of Solar Age common stock to High Tech, Cannistraro would prepare a favorable research report recommending the purchase of Solar Age securities for dissemination to the investing public by Wood Gundy.
Id.,
¶ 3 . It states that it was additionally part of the agreement that Bertoli and High Tech, in exchange for the Solar Age common stock, would obtain additional financing for Solar Age by means of a secondary public offering of securities.
Id.
Count 3 states that in or about June 1983, the Defendants used Nominee Brokerage Accounts to purchase Solar Age securities with the advance knowledge of the favorable research reports to be disseminated by Wood Gundy and with the expectation that the price of Solar Age securities would rise as a result of such reports.
Id.,
¶ 5 . It states Cannistraro prepared and caused Wood Gundy to disseminate to the investing public research reports recommending the purchase of Solar Age securities.
Id.
It states these research reports were false and misleading in that they failed to disclose that they were prepared by Cannistraro in exchange for the transfer of 200,000 shares of Solar Age common stock to High Tech. In addition, it states the Defendants had purchased Solar Age securities based on advance knowledge of the reports and intended to profit on the sale of the Solar Age securities after the dissemination of the reports caused the price of the securities to rise.
Id.
Count 3 states that between about June 1983 and about December 1983, the Defendants sold their Solar Age securities to the investing public, without disclosing their scheme to defraud, for a profit of at least $265,000.
Id.,
¶ 6 . Count 3 further states that the secondary public offering of Solar Age securities arranged by Bertoli raised over $990,000 for Solar Age.
Id.,
¶ 7 .
Count 3 lists sixteen overt acts committed by the Defendants between June 1983 and September 1985 in furtherance of this conspiracy. These overt acts are too numerous to set forth in full. However, they include a 6 June 1983 meeting attended by Bertoli, Cannistraro and the executive vice president of Solar Age in New York City, New York, overt act numbers 1 and 2, various telephone calls and correspondence made on 6 June 1983 and 20 June 1983 by Solar Age personnel at the prompting of Bertoli and Cannistraro, overt act numbers 4, 5 and 6, the 28 June 1983 wire transmission by Wood Gundy, made at the prompting of Cannistraro, of a research report recommending the purchase of Solar Age securities, overt act number 9, and the August and September 1985 mailing of the Solar Age prospectus in connection with
*680
the secondary offering of Solar Age securities, overt act number 15.
Finally, Counts 4, 5 and 6 charge Eisenberg alone with obstruction of justice in violation of 18 U.S.C. § 1503 . These counts incorporate by reference the factual allegations relating to the Cover-Up Scheme described in Count 1. Count 4 charges that from about August 1985 to about September 1985, in the District of New Jersey and elsewhere, Eisenberg secreted Monarch documents which were required to be produced pursuant to a grand jury subpoena
duces tecum.
Superseding Indictment, Count 4, ¶¶ 1-2. The grand jury had been empaneled by the United States District Court for the District of New Jersey on or about 18 March 1985.
Id.
Count 4 states Eisenberg prevented Monarch from producing documents responsive to a subpoena served on Monarch on 25 August 1985 by directing Monarch’s records custodian to misrepresent to the Office of the United States Attorney for the District of New Jersey that the documents were previously sent to the Chicago Strike Force.
Id.
Count 5 charges that from about July 1988 to about September 1988, in the District of New Jersey and elsewhere, Eisenberg concealed various Monarch documents which were required to be produced pursuant to the subpoena of a grand jury empaneled in the District of New Jersey on 17 March 1987 and caused false and misleading sworn testimony to be provided to the grand jury. Superseding Indictment, Count 5, ¶¶ 1-2. It states that in response to the subpoena, which was served on Monarch on 14 July 1988 and which required Monarch to produce documents and a records custodian to testify on 2 August 1988 before the grand jury, Eisenberg misrepresented in a letter to the Office of the United States Attorney that certain of these documents were previously sent to the Chicago Strike Force in response to other grand jury subpoenas.
Id.
It states that in fact, Eisenberg had previously secreted such documents in the Brooklyn Bakery.
Id.
In addition, Count 5 states that at the direction of Eisenberg, Monarch’s records custodian testified under oath before the grand jury that documents responsive to the grand jury subpoena and not produced had previously been sent by Monarch to the Chicago Strike Force in response to other grand jury subpoenas.
Id.
Finally, Count 6 states that from about August 1987 to about September 1987, Eisenberg secreted Monarch documents which were required to be produced pursuant to a trial subpoena
duces tecum
and an order of the United States District Court for the District of New Jersey. Superseding Indictment, Count 6, ¶¶ 1-2. It states that a trial subpoena
duces tecum
was served on Monarch on or about 26 August 1987 in connection with the trial of Cannistraro for the crimes charged in the 1987 Indictment. It states this subpoena required Monarch to produce documents to the Office of the United States Attorney on or before 9 September 1987 and to produce a records custodian to testify at trial, then scheduled for 24 September 1987.
Id.
It further states that on or about 10 September 1987, the United States District Court for the District of New Jersey issued an order requiring Monarch to produce the documents responsive to the subpoena.
Id.
It states that Monarch’s records custodian, at Eisenberg’s direction, misrepresented to the Office of the United States Attorney and to the FBI that such documents were previously sent to the Chicago Strike Force in response to other grand jury subpoenas, when in fact they were secreted by Eisenberg at the Brooklyn Bakery.
Id.
Discussion
I. Discovery-Related and Miscellaneous Motions
A.
Motion for Statements of Co-Conspirators
Bertoli, joined by Eisenberg, moves for disclosure by the Government of the statements of unindicted co-conspirators. Bertoli argues such statements are discoverable as his own statements under Fed. R.Crim.P. 16(a)(1)(A).
10
Bertoli Discovery
*681
Brief at 16. In addition, Bertoli argues such statements are discoverable under Fed.R.Crim.P. 16(a)(1)(C).
Id.
at 16-17 (citing
United States v. Enright,
579 F.2d 980 (6th Cir.1978);
Government of Virgin Islands v. Ruiz,
495 F.2d 1175 (3d Cir.1974);
United States v. Smith,
65 F.R.D. 464, 473 (N.D.Ga.1974);
United States v. McMillen,
489 F.2d 229 (7th Cir.1972),
cert. denied,
410 U.S. 955 , 93 S.Ct. 1420 , 35 L.Ed.2d 687 (1973);
United States v. Bloom,
78 F.R.D. 591 (E.D.Pa.1977)).
11
*682
Some courts have held that on a broad reading of Rule 16(a)(1)(A), it is possible to regard the statements of co-conspirators made during the course of and in furtherance of a conspiracy as the statements of the defendant and discoverable as such. 2 C. Wright,
Federal Practice and Procedure,
§ 253 n. 17 (1982 & Supp.1987);
United States v. Jackson,
757 F.2d 1486, 1491 (4th Cir.) (statements of a eo-conspirator may be imputed to a defendant under Federal Rule of Evidence 801(d)(2)(E) and are discoverable under Federal Rule of Criminal Procedure 16(a)(1)(A)),
cert. denied,
474 U.S. 994 , 106 S.Ct. 407 , 88 L.Ed.2d 358 (1985);
United States v. Konefal,
566 F.Supp. 698, 705-07 (N.D.N.Y.1983);
Even under this broad interpretation of Rule 16(a)(1)(A), however, discovery of the statements of co-conspirators may only be permitted on a Rule 16 motion if the Government does not intend to call such co-conspirators as witnesses at trial.
Jackson,
757 F.2d at 1491 ;
Konefal,
566 F.Supp. at 706 . If the Government intends to call such co-conspirators as witnesses, the Jencks Act, 18 U.S.C. § 3500 , expressly makes statements of Government witnesses, including co-conspirators, not discoverable until such time as the witness testifies. 18 U.S.C. § 3500 (a).
12
This broad interpretation of Rule 16(a)(1)(A) is not adopted. The weight of authority does not support extending Rule 16(a)(1)(A) beyond its literal mandate requiring disclosure of a defendant’s own statements.
See, e.g., United States v. Mayberry,
896 F.2d 1117, 1122 (8th Cir. 1990);
Tarantino,
846 F.2d at 1418 (holding Rule 16(a)(1)(A) does not include statements made by co-conspirators even if those statements can be attributed to the defendant for purposes of the rule against hearsay);
Orr,
825 F.2d at 1541 (Rule 16(a)(1)(A) does not apply to co-eonspirators’ statements);
United States v. Roberts,
811 F.2d 257 (4th Cir.1987)
(en banc)
(plain language of Rule 16(a)(1)(A) does not mention and is not intended to apply to statements made by co-conspirators; such statements are more properly governed by the Jencks Act);
Percevault,
490 F.2d at 130-32 (Rule 16(a) does not encompass statements made by co-conspirators who are potential government witnesses and the Jencks Act does not permit their disclosure).
See also In re United States,
834 F.2d 283, 284-86 (2d Cir.1987) (in which the Second Circuit cited with favor its previous decision in
Percevault,
490 F.2d at 126);
United States v. Fischbach & Moore, Inc.,
576 F.Supp. 1384, 1390 (W.D.Pa.1983) (rejecting broad interpretation of Rule 16 and expressing the view that co-conspirators’ statements are within the purview of the Jencks Act and not within the reach of Rule 16).
To the extent the statements of co-conspirators encompass exculpatory information, the Government has pledged to comply with its obligations under
Brady .
Government Brief at 71. In addition, as mentioned, the statements of eo-conspirators may be discoverable under the Jencks Act, if the co-conspirators testify at trial.
Roberts,
811 F.2d at 259 ;
Fischbach & Moore, Inc.,
576 F.Supp. at 1390 ;
United States v. Wolczik,
480 F.Supp. 1205, 1209 (W.D.Pa.1979);
see
Fed.R.Crim.P. 16(a)(2) (citing 18 U.S.C. § 3500 ).
Under the Jencks Act and Rule 26.2 of the Federal Rules of Criminal Procedure, which incorporates the substance of the
*683
Jencks Act, a defendant may request the pretrial statements of a Government witness that relate to his testimony once the witness has finished testifying on direct examination. The Jencks Act states: “[N]o statement or report in the possession of the United States which was made by a Government witness ... shall be the subject of subpena [sic], discovery, or inspection until said witness has testified on direct examination in the trial of the case.” 18 U.S.C. § 3500 (a). As the Third Circuit explained in
United States v. Murphy,
569 F.2d 771 (3d Cir.),
cert. denied,
435 U.S. 955 , 98 S.Ct. 1588 , 55 L.Ed.2d 807 (1978): “The blunt command of the statute together with the unequivocal legislative history has led to unbroken precedent in the Courts of Appeals denying to district courts the power to compel production of the statements of government witnesses until conclusion of direct examination at the trial.”
Id.
at 773 . In the instant case, the Government has indicated it will disclose any Jencks Act material the day before the witness testifies, Government Brief at 61 n. 30, although it is not required to do so.
The request by Bertoli, joined by Eisenberg, under Rule 16 for statements of co-conspirators is denied.
B.
Motion for List of Government Witnesses
Bertoli, joined by Eisenberg, seeks an order compelling disclosure by the Government of the witnesses it will call at trial. He argues such disclosure is warranted,
inter alia,
in light of the complexity of this case and in light of the lack of showing by the Government of any risk that witness intimidation would result from disclosure. This motion is baseless.
A defendant in a noncapital case does not have a right to discover a list of prospective Government witnesses.
Weatherford v. Bursey,
429 U.S. 545, 559 , 97 S.Ct. 837, 845 , 51 L.Ed.2d 30 (1977) (due process does not require Government to provide names of witnesses unfavorable to defendant);
Government of the Virgin Islands v. Martinez,
847 F.2d 125, 128 (3d Cir.1988) (“[T]he government is not automatically required to disclose the name[s] of ... witnesses] in a non-capital criminal case.”);
United States v. Di Pasquale,
740 F.2d 1282 , 1294 (3d Cir.1984) (Government is not required to divulge the identity of its witnesses in a non-capital case),
cert. denied,
469 U.S. 1228 , 105 S.Ct. 1226 , 84 L.Ed.2d 364 (1985);
United States v. Addonizio,
451 F.2d 49, 62 (3d Cir.1971) (“[I]n no event is the Government required to divulge the identity of its witnesses in a non-capital case.”),
cert. denied,
405 U.S. 936 , 92 S.Ct. 949 , 30 L.Ed.2d 812 ,
reh’g denied,
405 U.S. 1048 , 92 S.Ct. 1309 , 31 L.Ed.2d 591 (1972).
It is within the discretion of a court to “order such disclosure to ensure the effective administration of the criminal justice system.”
United States v. Higgs,
713 F.2d 39 , 44 n. 6 (3d Cir.1983),
cert. denied sub nom.,
464 U.S. 1048 , 104 S.Ct. 725 , 79 L.Ed.2d 185 (1984). However, it is likewise within the discretion of a court to refuse to compel such disclosure where such disclosure may endanger the witnesses.
Martinez,
847 F.2d at 128 . A request to compel disclosure has been denied where no compelling justification for such disclosure was offered.
See United States v. Zolp,
659 F.Supp. 692, 704 (D.N.J.1987) (“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.”). In addition, disclosure has been denied even in complex cases.
See, e.g., Zolp,
659 F.Supp. at 704 ;
United States v. Vastola,
670 F.Supp. 1244, 1268 (D.N.J.1987).
Bertoli does not contend he is entitled to the list of Government witnesses he seeks. Rather, he argues this court has discretionary power to order such disclosure and that it is warranted in this case because the need of the defense for the disclosure of prospective witnesses outweighs the Government’s interest in not divulging the identities of the witnesses or the content of its case in advance of trial. Bertoli, however, has not presented any justification, much more compelling justification, for such sweeping discovery in this case.
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In addition, compelling reasons exist to refuse such disclosure. The Government submitted the affidavit of FBI Special Agent Michael J. Cahill (“Cahill”) to support its contention that Eisenberg and Bertoli have attempted to buy the silence of Cannistraro. Cahill asserted: “My investigation has revealed evidence that Richard Bertoli and Leo Eisenberg have promised Richard Cannistraro one million dollars for every year he spent in jail in return for Cannistraro’s silence about the illegal activities of the Monarch RICO enterprises.” Cahill Aff., ¶ 2.
13
In addition, the Superseding Indictment charges Eisenberg with obstructing justice by directing the Monarch records custodian to misrepresent to the Office of the United States Attorney, and to do so under oath during grand jury proceedings, that subpoenaed documents had previously been sent to the Chicago Task Force. It also charges that Eisenberg obstructed justice by secreting certain subpoenaed documents in the Brooklyn Bakery. Moreover, Cannistraro pleaded guilty to the 1987 Indictment which charged him with obstructing justice by providing money to a grand jury witness in an effort to have the witness lie under oath to the grand jury about the witness’ stock nominee relationship with Cannistraro.
See Cannistraro,
694 F.Supp. at 65.
Although not required to do so, the Government has agreed to provide the Defendants with a list of unindicted co-conspirators and co-racketeers. Government Brief at 57 n. 26 and 74 n. 33. Bertoli’s motion for an order compelling the Government to disclose its witness list is denied.
C.
Motion for Giglio Material
Bertoli, joined by Eisenberg, additionally seeks impeaching materials possessed by the Government as to its witnesses. Such material is discoverable pursuant to
Giglio v. United States,
405 U.S. 150 , 92 S.Ct. 763 , 31 L.Ed.2d 104 (1972).
In
Giglio ,
the Supreme Court extended the rule set forth in
Brady,
373 U.S. at 83 , 83 S.Ct. at 1194 , requiring the Government to disclose to the defendant exculpatory material in its possession, to encompass information that might be used to impeach the credibility of Government witnesses when the reliability of those witnesses could be determinative of guilt or innocence.
Id.
405 U.S. at 154, 92 S.Ct. at 766.
14
Evidence that might be used to impeach Government witnesses by showing bias or interest has been deemed to fall within the purview of
Giglio. United States v. Bagley,
473 U.S. 667, 676 , 105 S.Ct. 3375, 3380 , 87 L.Ed.2d 481 (1985);
Higgs,
713 F.2d at 42 .
In
Higgs ,
the Third Circuit held a defendant's due process right to a fair trial is satisfied when information relating to the credibility of Government witnesses is disclosed the day the witnesses are scheduled to testify.
Higgs,
713 F.2d at 44 . The Circuit explained the requirements of due process depend upon what information has been requested and how that information will be used by the defendant.
Id.
at 43-44 .
In
Higgs ,
the defendant made a specific request for the names and addresses of Government witnesses who were granted
*685
immunity or leniency and for the substance of any agreements between those witnesses and the Government.
Id.
at 42 . The Circuit stated:
The
Brady
material in this case was information that appellees could use on cross-examination to challenge the credibility of government witnesses. For that type of material,
we think appellee’s right to a fair trial will be fairly protected if disclosure is made the day that the witness testifies.
Disclosure at that time will fully allow appellees to effectively use that information to challenge the veracity of the government’s witnesses.
Id.
at 44 (emphasis added).
The
Higgs
court held it was an abuse of discretion for the trial court to order disclosure of the material a week prior to trial. In so holding, the court observed the purpose of requiring disclosure of impeachment information is not to assist the defense in a general pretrial investigation, but only to give the defense an opportunity to effectively cross-examine the Government’s witnesses at trial.
See id.
at 44-45 .
Here, the Government has indicated it will disclose any
Giglio
material in its possession the day before the witness testifies. Government Brief at 61. In addition, the same reasons set forth above for denying Bertoli’s motion for disclosure of the Government’s witnesses also weigh against ordering disclosure of
Giglio
material at this time. Bertoli’s motion for early disclosure of
Giglio
material is denied.
15
D.
Motions for Disclosure of Rule 404(b) Evidence the Government Intends to Admit
Bertoli and Eisenberg
16
seek disclosure of Rule 404(b) Evidence the Government intends to admit concerning other crimes, wrongs or acts by Bertoli and Eisenberg in order to prove motive, opportunity, intent, preparation, plan, knowledge, identity or absence of mistake or accident with respect to the offenses charged. Bertoli Discovery Brief at 14; Eisenberg Brief at 11-13.
Bertoli argues: “The importance of disclosure of evidence of other crimes, wrongs, or acts is apparent____ [P]re-trial disclosure of the Government’s intention to use such evidence would enable the court to make a carefully reasoned judgment with respect to the admissibility of such evidence.”
Id.
at 15. Eisenberg argues pre-trial disclosure of such evidence “would minimize any improper prejudicial effect of this evidence.” Eisenberg Brief at 12.
Questions as to the admissibility of prior bad acts under Rule 404(b) are properly asserted during trial, not at the pretrial stage.
Vastola,
670 F.Supp. at 1268 (it would be “unduly speculative” to rule on the admissibility of “other acts” evidence before hearing the factual context at trial);
see United States v. Matos-Peralta,
691 F.Supp. 780, 791 (S.D.N.Y.1988) (disclosure of Rule 404(b) material not subject to minimum time limit because relevance will change as “the proof and possible defenses crystallize”).
Federal Rules of Criminal Procedure 12(d)(2) requires the Government to give notice of its intention to use evidence at the request of the defendant. This rule, however, is limited to evidence needed for a defendant’s motion to suppress and to evidence discoverable under Fed.R.Crim.P. 16. Although a defendant’s prior criminal record is discoverable under Rule 16, evidence of prior bad acts is not.
See Fischbach & Moore, Inc.,
576 F.Supp. at 1384 ;
*686
United States v. Ramirez,
602 F.Supp. 783 (S.D.N.Y.1985) (defendant’s request for pretrial hearing to determine admissibility of alleged prior or subsequent similar act denied; defendant instructed to seek ruling during course of trial).
Prior to the Supreme Court’s decision in
Huddleston v. United States,
485 U.S. 681, 687 , 108 S.Ct. 1496, 1500 , 99 L.Ed.2d 771 (1988), courts encouraged pretrial disclosure by the Government of its intention to introduce evidence of prior bad acts.
See United States v. Foskey,
636 F.2d 517, 525-26 (D.C.Cir.1980);
Fischbach & Moore, Inc.,
576 F.Supp. at 1397-98 . This early disclosure has been encouraged in order to facilitate the court’s determination as to the admissibility of evidence under Rule 404(b). In order for bad acts evidence to be admissible, the Government must establish the relevancy of the evidence to a material issue other than character, such as motive, opportunity, intent, identity or absence of mistake or accident.
See Huddleston,
485 U.S. at 687 , 108 S.Ct. at 1500 ;
Foskey,
636 F.2d at 523 . In
Huddleston ,
the Court explained that “[i]n the Rule 404(b) context, similar act evidence is relevant only if the jury can reasonably conclude that the act occurred and that the defendant was the actor.”
Huddleston,
485 U.S. at 689 , 108 S.Ct. at 1501 .
After the threshold determination is made that the evidence is probative of one of the issues listed in Rule 404(b), the court must determine “whether the danger of undue prejudice outweighs the probative value of the evidence in view of the availability of other means of proof and other factors appropriate for making decisions of this kind under Rule 403.”
17
Huddleston,
485 U.S. at 688 , 108 S.Ct. at 1500 (quoting Fed.R.Evid. 404(b) advisory committee note);
Foskey,
636 F.2d at 523 . In
Huddleston ,
the Court indicated that “the strength of the evidence establishing the similar act is one of the factors the court may consider when conducting the Rule 403 balancing.”
Huddleston,
485 U.S. at 689 n. 6, 108 S.Ct. at 1501 n. 6.
In
Foskey ,
the D.C. Circuit suggested that the Government should exercise its discretion under Fed.R.Crim.P. 12(d)(1)
18
and notify the defense before trial of its intention to introduce any evidence of prior bad acts.
Foskey,
636 F.2d at 526 n. 8. The court indicated further that if the defense raised a motion to suppress, the Government should then supply the district court with a written analysis of the logical inferences justifying admission of the evidence. Given the complexity of these questions, the court reasoned such a procedure would obviate the need for speculation regarding the Government’s theory -of the relevance of the evidence to the issues listed in Rule 404(b).
Id.
The
Foskey
court explained:
Rules 403 and 404(b) are not obstacles to be cleared at all costs, even by cutting around corners whenever it is possible to do so. These rules were designed to ensure a defendant a fair and just trial based upon the evidence presented, not upon impermissible inferences of criminal predisposition or by confusion of the issues. The district court, required to make on-the-spot decisions, does not have the luxury of engaging in the type of careful balancing we have undertaken here---- There is a large measure of responsibility in the prosecutor to weigh the evidence independently: if its relevance is outweighed by the danger of unfairly prejudicing, confusing, or misleading the jury, it should not be introduced. The assistant United States attorney must step back from his or her partisan role and make these determina
*687
tions in an objective and fair-minded fashion before proffering the evidence.
Id.
at 525-26 .
Similarly, the district court in
Fischbach
encouraged the Government to exercise its discretion and disclose to the defense bad acts which it intended to introduce at trial.
Fischbach & Moore, Inc.,
576 F.Supp. at 1397 -98 (quoting
Foskey,
636 F.2d at 525-26 ). The court pointed out, however, that “[w]hile we believe this early disclosure is to be encouraged, we know of no authority requiring the government to disclose such information.”
Id.
at 1398.
Although the
Foskey
decision offered various reasons for early disclosure and the
Fischbach
decision encouraged such disclosure, it is significant that in
Huddleston ,
a unanimous decision, the Supreme Court did not mandate or even address the timing of such disclosure. In light of the holdings of
Foskey
and
Fischbach,
as well as of other cases, it appears that the Supreme Court was aware of such pretrial discovery requests concerning Rule 404(b) Evidence but chose to continue the procedure of allowing the Government to determine when such pretrial disclosure will be made.
In the instant case, the Government asserts: “Should the United States seek to offer any evidence pursuant to Rule 404(b), it will notify the [cjourt and the [Defendants prior to the introduction of such evidence. This will afford the [Defendants adequate notice, and the [ceurt adequate time, to weigh the probative value of the evidence against its possible prejudicial impact.” Government Brief at 64. The motions of Bertoli and Eisenberg for pre-trial disclosure of Rule 404(b) Evidence are denied.
E.
Motion for Identification of Brady Material Among Documents Previously Produced
Bertoli, joined by Eisenberg, seeks an order compelling the Government to identify the specific documents among the materials thus far produced which constitute
Brady
material. Bertoli Discovery Brief at 37. In response, the Government asserts it has no obligation to identify
Brady
material among documents produced, but has an obligation only to make available to the Defendants
Brady
material in its possession to which the Defendants do not have access or to which the Defendants could not obtain access through the exercise of reasonable diligence. Government Brief at 66. The Government argues the identification of
Brady
material is information which the Defendants could ascertain through the .exercise of reasonable diligence.
Id.
at 67. The Government asserts its records indicate that between 10 November 1989 and 9 February 1990, representatives of the Defendants spent over 100 hours reviewing these documents and deciding which documents it would seek to have copied.
Id.
at 65.
Brady
is “designed to ‘assure that the defendant will not be denied
access
to exculpatory evidence
only known to the Government.’ ” United States v. Grossman,
843 F.2d 78, 85 (2d Cir.1988) (quoting
United States v. LeRoy,
687 F.2d 610, 619 (2d Cir.1982),
cert. denied,
459 U.S. 1174 , 103 S.Ct. 823 , 74 L.Ed.2d 1019 (1983)) (emphasis added),
cert. denied,
488 U.S. 1040 , 109 S.Ct. 864 , 102 L.Ed.2d 988 ,
reh’g denied,
490 U.S. 1059 , 109 S.Ct. 1974 , 104 L.Ed.2d 442 (1989). As the Third Circuit has stated, “ ‘the [Government is not obliged under
Brady
to furnish a defendant with information which he already has or, with any reasonable diligence, he can obtain himself.’ ”
United States v. Starusko,
729 F.2d 256, 262 (3d Cir.1984) (quoting
United States v. Campagnuolo,
592 F.2d 852, 861 (5th Cir.1979)).
See also United States v. Wilson,
901 F.2d 378, 381 (4th Cir.1990);
United States v. Meros,
866 F.2d 1304, 1309 (11th Cir.),
cert. denied,
493 U.S. 932 , 110 S.Ct. 322 , 107 L.Ed.2d 312 (1989);
United States v. Newman,
849 F.2d 156, 161 (5th Cir.1988).
The Government represents it has complied with its
Brady
obligations. Bertoli does not assert that the Government has concealed exculpatory evidence. Rather, he asserts that he should not have to expend the effort required to review a substantial number of documents in order to
*688
ascertain whether they contain exculpatory information. He asserts the onus of making such effort should be borne by the Government. The Government represents, and Bertoli does not dispute, that counsel for the Defendants spent a substantial amount of time reviewing the documents produced by the Government. Moreover, Bertoli does not complain that he was denied sufficient access to these documents. The Government has complied with its
Brady
obligations and the motion of Bertoli, joined by Eisenberg, is denied.
F.
Motion for Production of Materials Initially Disclosed to the Defendants But Later Withdrawn
Bertoli, joined by Eisenberg, moves for production of evidence which was initially produced in November 1989 for inspection and copying. Counsel for Bertoli states that after the material had been reviewed and marked for copying by Bertoli, and after the copying process was completed, the Government first informed counsel for Bertoli that certain items had been withdrawn and would not be copied for Bertoli. Bertoli now moves for production of these items for inspection and copying or, in the alternative, for a detailed explanation of these items in order to determine whether they are discoverable under Fed.R.Crim.P. 16. Bertoli Discovery Brief at 33. Bertoli argues: “In light of the fact that the Government has already produced the grand jury transcripts and the audio cassette tapes, it should be compelled to copy and provide them to defendant Bertoli.”
Id.
at 35.
H. Richard Chattman (“Chattman”), an attorney for Bertoli, states that on 6 November 1989, at the arraignment of Bertoli, the Government offered to make available a substantial amount of evidence in this case for inspection and copying by the Defendants. Subsequently, the Government produced documents and tapes for the Defendants. Chattman Aff., ¶ 2. The produced materials included twenty-four transcripts of grand jury testimony in the matter of
United States v. Richard Roe,
dated May, 1980, venued in the Southern District of New York (the
“Roe
Transcripts”).
Id.,
¶ 4. In addition, seventeen audio cassette tape recordings were marked for copying.
Id.
On 11 April 1990, after the materials marked for copying by the Defendants were reproduced, Chattman was told by David Rosenfield (“Rosenfield”), Special Assistant United States Attorney, that the
Roe
Transcripts were removed from the copied materials and would not be turned over.
Id.,
¶ 5. Rosenfield informed Chattman these materials did not relate to activities charged in the Superseding Indictment and the tapes were not recordings of conversations of any of the Defendants.
Id.,
11 5.
Bertoli cites no authority for the proposition that a defendant is entitled as a matter of right to materials inadvertently disclosed by the Government. The Government represents it “is well aware of, and has complied with, its obligations under Rule 16 and this [cjourt’s discovery order.” Government Brief at 46. It represents that shortly after the Defendants’ arraignment on 6 November 1989, it made discovery material available to the Defendants for review and copying, including a substantial amount of material it was not required to produce at that time.
See infra
at 689-691. In addition, the Government states it has complied with its obligation to produce
Brady
material and will continue to comply with it should any exculpatory material come into its possession.
Id.
at 691-692. The Government additionally represents it will produce
Giglio
and Jencks Act material concerning a v/itness the day before the witness testifies.
Id.
at 693. The Defendants are entitled to no more. The motion of Bertoli and Eisenberg for discovery of materials previously produced inadvertently by the Government is denied.
G.
Motion for a Bill of Particulars
Bertoli, joined by Eisenberg, moves pursuant to Fed.R.Crim.P. 7(f) for a Bill of Particulars. The Bill of Particulars submitted by Bertoli is thirty-three pages in length and includes seventy questions relative to Count 1, seven questions relative to Count 2, fifteen questions relative to Count 3 and seven questions relative to the
*689
forfeiture allegations of the Superseding Indictment. Many of these questions contain multiple subparts.
The Bill of Particulars submitted by Bertoli is too lengthy and detailed to set forth in full or to describe comprehensively. The questions include requests for specifics as to the identities of the alleged Nominee Brokerage Accounts, the identities of persons coming under the rubric of “others” set forth in the Superseding Indictment, specific places within the District of New Jersey referred to in the Superseding Indictment, specifics as to how various documents referred to in the Superseding Indictment were fraudulent, the subject documents of the charged instances of mail fraud perpetrated by Bertoli, how such instances related to the execution of the charged scheme and specifics as to transactions executed by the M
&
I Fund and Bullock Fund portfolio managers,
inter alia.
Serving a function analogous to an indictment, a Bill of Particulars provides the defendant with notice of the charges against him. It is designed “ ‘to identify with sufficient particularity the nature of the charge[s] pending against [the defendant], thereby enabling [him] to prepare for trial, to prevent surprise, and to interpose a plea of double jeopardy should he be prosecuted a second time for the same offense.’ ”
United States v. Davidoff,
845 F.2d 1151, 1154 (2d Cir.1988) (quoting
United States v. Bortnovsky,
820 F.2d 572, 574 (2d Cir.1987)
(per curiam)); see United States v. Rosa,
891 F.2d 1063, 1066 (3d Cir.1989);
United States v. Adams,
759 F.2d 1099, 1113 (3d Cir.),
cert. denied sub nom.,
474 U.S. 971 , 106 S.Ct. 336 , 88 L.Ed.2d 321 (1985). A Bill of Particulars should be granted when, in the trial court’s discretion, it appears the indictment is too vague to inform the defendant of the nature of the charges against him.
Rosa,
891 F.2d at 1067 ;
Addonizio,
451 F.2d at 63-64 ;
Zolp,
659 F.Supp. at 706 .
Although Rule 7(f) is construed liberally, it does not permit a defendant to receive wholesale discovery of the Government’s evidence.
Rosa,
891 F.2d at 1066 ;
Addonizio,
451 F.2d at 64 . Nonetheless, if the defendant seeks legitimate information, his request for a Bill of Particulars cannot be denied merely because providing the information would divulge details of the Government’s evidence.
Addonizio,
451 F.2d at 64 n. 16. The Third Circuit has stated:
[T]rial judges must be allowed to exercise broad discretion in order to strike a prudent balance between the defendant’s legitimate interest in securing information concerning the government’s case and numerous countervailing considerations ranging from the personal security of witnesses to the unfairness that can result from forcing the government to commit itself to a specific version of the facts before it is in a position to do so.
Rosa,
891 F.2d at 1066 .
In order to determine whether a Bill of Particulars is appropriate in this case, it is necessary to examine the discovery already produced by the Government in addition to the allegations of the indictment.
United States v. Boffa,
513 F.Supp. 444, 485 (D.Del.1980). As to the discovery produced in the instant case, the Government represents it has complied with its obligations under Fed.R.Crim.P. 16
19
and this court’s discovery order, filed 23 May 1990 (the “23 May 1990 Order”),
20
as well as its obligations under
Brady .
Government Brief at 46-47. In addition, the Government represents it has made documents and other discovery materials available to the Defendants for review and copying. It states:
These materials included, not only that which would then have been discoverable under Rule 16 and the [c]ourt’s probable discovery order, but also many documents that would not have been discoverable until thirty days before trial
*690
and many documents that fell beyond the scope of the discovery rules. Moreover, the [Defendants have received two lengthy and detailed affidavits outlining evidence that connects the [Defendants to various Cayman Islands bank accounts and [Njominee [Bjrokerage [Ajccounts
21
and have had access to numerous relevant documents and testimony from [the] 1987 [Cannistraro] criminal prosecution and the related SEC civil case.
Government Brief at 46.
22
The Government also asserts:
[T]he [Djefendants are also defendants in the related SEC civil case concerning LCI and Toxic Waste currently pending in the Southern District of New York,
23
and, as a result, have had access to voluminous SEC records and to numerous transcripts of witness testimony before the SEC that are relevant to the charges in the Superseding Indictment. Moreover, prior to the issuance of the stay of discovery in that case, Bertoli, acting
pro se,
and Eisenberg’s counsel attended several depositions and were able to question these witnesses. Even subsequent to the issuance of the stay, Bertoli, along with Eisenberg’s counsel, were able to depose at great length SEC investigator Fred Florschutz.
Government Brief at 80 (citation omitted).
The Defendants do not dispute these representations of the Government.
24
*691
In addition, the Superseding Indictment is a seventy-nine page document which describes the alleged illegal conduct in detail too exhaustive to set forth in full. To describe a few of its allegations, as to the violation of RICO section 1962(c) charged in Count 1, the Superseding Indictment identifies the RICO enterprise as Monarch, states the period of time during which the racketeering schemes took place and states these schemes took place in New Jersey. While Bertoli’s Bill of Particulars requests information as to the substance of the alleged fraud and specifics as to the instances of mail fraud, the Superseding Indictment identifies several reports and articles which were allegedly fraudulent, states several ways in which they were fraudulent and identifies by date and content several instances of mail and wire fraud which constitute the predicate acts of racketeering. The Superseding Indictment exhaustively describes the racketeering schemes and their objects and identifies additional participants in the scheme as the M & I Fund and Bullock Fund portfolio managers and the Hallswell research analyst.
As to Count' 2, charging conspiracy to violate RICO section 1962(c) in violation of RICO section 1962(d), the Superseding Indictment states the period of the duration of the conspiracy and lists seventeen overt acts perpetrated in furtherance of the conspiracy. As to Count 3, charging conspiracy to violate Section 10(b) and Rule 10b-5 in violation of 18 U.S.C. § 371 , the Superseding Indictment states the period during which the conspiracy took place, that it existed in New Jersey and describes the schemes as to which the Defendants conspired, involving the securities of Solar Age and High Tech and the use of Nominee Brokerage Accounts. All that is required of an indictment is that it give the defendant sufficient information to prepare his defense against the crimes alleged.
United States v. Debrow,
346 U.S. 374, 377-78 , 74 S.Ct. 113, 115 , 98 L.Ed. 92 (1953).
Numerous courts have ruled that detailed discovery requests, such as those made by Bertoli in his request 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 [is] tantamount to a request for ‘wholesale discovery of the Government’s evidence,’ which is not the purpose of a [B]ill of [Particulars under Fed.R.Crim.P. 7(f).”
United States v. Armocida,
515 F.2d 49, 54 (3d Cir.) (citing
Addonizio,
451 F.2d at 64 ),
cert. denied sub nom.,
423 U.S. 858 , 96 S.Ct. 111 , 46 L.Ed.2d 84 (1975). For example, as discussed, a defendant is not entitled to a list of the identities of Government witnesses.
Di Pasquale,
740 F.2d at 1294;
United States v. Mitchell,
540 F.2d 1163, 1166 (3d Cir.1976),
cert. denied,
429 U.S. 1099 , 97 S.Ct. 1119 , 51 L.Ed.2d 547 (1977);
Government of Virgin Islands v. Ventura,
476 F.2d 780 , 781 n. 1 (3d Cir. 1973)
(per curiam); Addonizio,
451 F.2d at 62 . Moreover, a defendant is not entitled to a list of uncharged overt acts and uncharged criminal conduct.
Vastola,
670 F.Supp. at 1270 . The detail contained in the instant Superseding Indictment is well beyond that required of an indictment. The requested Bill of Particulars is a patent abuse and is baseless.
Similar requests for specific facts about an alleged conspiracy sought by way of demand for a Bill of Particulars have been denied by district courts.
See, e.g., Zolp,
659 F.Supp. at 706 ;
United States v. Wilson,
565 F.Supp. 1416, 1438-39 (S.D.N.Y.1983);
Boffa,
513 F.Supp.
at 485
(“[N]or is it necessary for the Government to disclose in a [B]ill of [Particulars the precise details that a defendant and his alleged co-conspirators played in forming and executing a conspiracy or all the overt acts the Government will prove in establishing the conspiracy.”);
United States v. Heldon,
479 F.Supp. 316, 323 (E.D.Pa.1979) (court denied motion for Bill of Particulars
*692
brought by defendants charged- with drug conspiracy who sought specific times and places drugs were allegedly distributed and overt acts in furtherance of conspiracy).
For the above reasons, the motion of Bertoli, joined by Eisenberg, for a Bill of Particulars is denied.
H.
Motion for the Production of Enumerated Documents Characterized as Brady Material
Without briefing this question, and without explaining how such a request falls under
Brady
or is otherwise relevant, Bertoli, joined by Eisenberg, requested in his Notice of Motion a number of documents of the SEC and National Association of Securities Dealers (“NASD”).
25
In response, the Government again pledges to provide any exculpatory materials which come into its possession. Government Brief at 58 n. 27. The motion for the discovery of the materials specified in Bertoli’s Notice of Motion is denied.
I.
Preservation of Rough Notes and Other Communications
Bertoli, joined by Eisenberg, requests the Government retain any rough notes of interviews with all witnesses for possible production at a later date, pursuant to
United States v. Vella,
562 F.2d 275 (3d Cir.1977),
cert. denied,
434 U.S. 1074 , 98 S.Ct. 1262 , 55 L.Ed.2d 779 (1978). There are instances in which such rough notes must be produced, as when they contain exculpatory material under
Brady,
373 U.S. at 83 , 83 S.Ct. at 1194 , or qualify as
Jencks
material, 18 U.S.C. § 3500 .
United States v. Ammar,
714 F.2d 238 (3d Cir.),
cert. denied sub nom.,
464 U.S. 936 , 104 S.Ct. 344 , 78 L.Ed.2d 311 (1983).
The Government states it does not oppose this motion and is “aware of its obligation under
[Ammar]
to preserve notes of interviews and will comply with those obligations.” Government Brief at 12. The motion by Bertoli and Eisenberg is denied as moot.
J.
Motion for Transcripts and Tape Recordings
Without stating the basis under which such materials are discoverable, without briefing the question and without describing the relevance of such materials, Bertoli, joined by Eisenberg, seeks production of “[a]ny transcripts made of the audio cassette tapes provided to the defendants” and “[a]ll tape recordings made of defendant Cannistraro’s phone calls while incarcerated in federal prisons.” Notice of Motion. The Government represents that in the event it decides to use any transcripts of audio tapes in its direct case it will provide such transcripts to the Defendants at the appropriate time. Government Brief at 87. As stated, Bertoli has set forth no basis for ordering production of these materials. The motion is denied.
K.
Motion for an Order Precluding the Admission of Any Testimony by David O’Connor, Esq., or Marvin Gersten, Esq., Protected by the Attorney-Client Privilege
Bertoli moves to suppress all statements made during any meeting between or among Bertoli and Cannistraro and Cannistraro’s former defense counsel, David O’Connor, Esq. (“O’Connor”), and Marvin Gersten, Esq. (“Gersten”), as inadmissible against Bertoli based on the joint defense privilege. Bertoli Discovery Brief at 9.
*693
In support of the motion, Bertoli submits the affidavit of O’Connor, in which O’Con-nor states he represented Cannistraro in connection with an investigation by the SEC beginning in March 1984. O’Connor Aff., II1. O'Connor states Bertoli and Cannistraro were named as co-defendants in the SEC Civil Action, in which Bertoli represented himself
pro se. Id.,
11 3. O’Con-nor states that beginning in 1987, he met on a “regular basis” with Bertoli, Cannistraro and O’Connor’s law partner, Gersten, to prepare a common defense strategy.
Id.,
¶ 5. In addition, O’Connor met separately with Bertoli alone on occasion and provided Bertoli and Cannistraro with a work space at his office, where Bertoli and Cannistraro jointly worked on various aspects of their joint defense.
Id.,
11116-7. O’Connor states he was retained by Cannistraro to represent him when Cannistraro was indicted under the 1987 Indictment, which prosecution involved “factual and legal issues directly related to the [SEC] [C]ivil [A]ction.”
Id.,
U 8. He concludes:
From the first time I met Richard Bertoli, shortly after Mr. Cannistraro was indicted, until after my client pleaded guilty and was sentenced ..., every contact I had with Mr. Bertoli was part of a joint defense, and, thus, I believe that all statements made during our conferences were and continue to be privileged as to Mr. Bertoli.
Id.,
¶ 9.
In response, the Government states it “will not offer into evidence against Bertoli or Eisenberg any testimony by [Gersten] or [O’Connor] that is protected by a valid joint defense privilege.” Government Brief at 13. In reply, Bertoli argues the Government’s assertion cannot be tested unless it discloses the substance of the testimony. He argues such disclosure is necessary in order for him to move for severance from Cannistraro. Bertoli Reply Brief at 36. In a footnote, Bertoli observes: “Obviously, testimony by Messrs. Gersten and O’Con-nor which is in violation of defendant Bertoli’s attorney-client privilege could not be introduced at a joint trial.” Bertoli Reply Brief at 35 n. 12.
The Government represents it will not seek to introduce testimony which is protected by a joint defense privilege. The Government’s representation is accepted and Bertoli’s motion is denied as moot.
L.
Motion for an Order Preserving the Right of Bertoli to Make Applications Under Fed.R.Crim.P. 17(c) for Subpoenas Prior to Trial
In his Notice of Motion, Bertoli moved for an “[o]rder preserving the right of defendant Bertoli to make applications under Fed.R.Crim.P. 17(c)
26
for subpoenas prior to trial as such become necessary.” Notice of Motion, 11 3. The Government “does not oppose the right of any party, in appropriate circumstances, to apply to the [c]ourt for a Rule 17(c) subpoena.” Government Brief at 13. In light of the Government’s representation, the motion is denied as moot.
M.
Motion for an Order Preserving Bertoli’s Right to Move to Suppress Wiretap Evidence or Evidence Seized in Searches
In his Notice of Motion, Bertoli moves for an “[o]rder preserving Defendant Bertoli’s right to move to suppress wiretap evidence seized in searches, or the fruits thereof, including but not limited to the February 6, 1989 search of 8 Avenue ‘C’, Nanuet, New York, if the Government gives notice of its intent to use such evidence.” Notice of Motion, II4. The Government states in response:
*694
[I]f the United States is in a position to use the seized documents to which the [Defendants refer, it will inform the [Defendants of that fact, and it will not oppose their right to make an appropriate motion to suppress. Similarly, if the United States is in a position to use any wiretap evidence and if that evidence is discoverable under Rule 16 ..., the United States will inform the [Defendants of that evidence and will not oppose their right to make an appropriate motion to suppress.
Government Brief at 13. Bertoli’s motion is denied as moot. Bertoli should move, as promptly as possible, so as not to delay or disrupt trial.
II. Motion for Change of Venue as to the Obstruction of Justice Allegations
Eisenberg moves for a change of venue of his trial insofar as the allegations as to obstruction of justice are concerned. “Eisenberg argues that this [cjourt is not the proper venue for trial of the obstruction of justice counts and related racketeering acts and overt acts since the alleged obstructive conduct took place in the Eastern District of New York.” Eisenberg Brief at 7.
The Superseding Indictment alleges the Cover-Up Scheme, the seventh scheme alleged in Count 1, involved a scheme to cover-up the Defendants’ racketeering activity by obstructing justice. It alleges Eisenberg obstructed justice by concealing documents responsive to the subpoenas of two different grand juries empaneled in the District of New Jersey. It alleges Eisenberg concealed such documents by directing that misrepresentations be made to the Office of the United States Attorney for the District of New Jersey as to the whereabouts of such documents. In addition, it alleges Eisenberg directed such misrepresentations to be made under oath before those grand juries as to the whereabouts of the relevant documents. It also alleges Eisenberg obstructed justice by secreting documents in the Brooklyn Bakery, which is located within the Eastern District of New York.
In addition, Counts 4, 5 and 6, which incorporate by reference the factual allegations concerning the Cover-Up Scheme, charge Eisenberg with obstruction of justice in violation of 18 U.S.C. § 1503 . Count 4 states that Eisenberg obstructed justice by directing that misrepresentations be made to the Office of the United States Attorney for the District of New Jersey as to the whereabouts of documents responsive to the subpoena of a grand jury empaneled on 18 March 1985 in the District of New Jersey. Count 5 states that Eisenberg obstructed justice by misrepresenting in a letter to the Office of the United States Attorney the whereabouts of documents responsive to the subpoena of a grand jury empaneled in the District of New Jersey on 17 March 1987. It states that documents responsive to such subpoena were secreted by Eisenberg in the Brooklyn Bakery. It also states Eisenberg directed the Monarch records custodian to misrepresent under oath before the grand jury the whereabouts of such documents. Count 6 states that Eisenberg obstructed justice by preventing documents responsive to a trial subpoena
duces tecum
relative to the 1987 Indictment of Cannistraro, and to an order of the United States District Court for the District of New Jersey enforcing that subpoena, from being produced. It states that Eisenberg secreted such documents in the Brooklyn Bakery and directed the Monarch records custodian to misrepresent to the FBI and to the Office of the United States Attorney the whereabouts of such documents.
The United States Constitution guarantees to criminal defendants a trial “in the State where the said Crimes shall have been committed,” U.S. Const, art. Ill, § 2, cl. 3, by a “jury of the State and district wherein the crime shall have been committed.” U.S. Const, amend. VI. This right is implemented by Fed.R.Crim.P. 18, which provides: “Except as otherwise permitted by statute or by these rules, the prosecution shall be had in a district in which the offense was committed.”
Id.
The situs of a crime must be determined by reference to the statute proscribing the criminal act.
Johnston v. United States,
351 U.S. 215 ,
*695
220, 76 S.Ct. 739, 742 , 100 L.Ed. 1097 (1956),
reh’g denied,
352 U.S. 860 , 77 S.Ct. 23 , 1 L.Ed.2d 69 (1956).
While the Third Circuit has not ruled on the question, the majority of circuit courts which have considered the proper venue for charges of obstruction of justice in violation of 18 U.S.C. § 1503 have ruled that venue lies where the obstructed proceedings took place.
See United States v. Reed,
773 F.2d 477, 486 (2d Cir.1985);
United States v. Scaife,
749 F.2d 338, 341, 346 (6th Cir.1984);
United States v. Bar-ham,
666 F.2d 521, 523-24 (11th Cir.),
cert. denied,
456 U.S. 947 , 102 S.Ct. 2015 , 72 L.Ed.2d 470 ,
reh’g denied,
456 U.S. 1012 , 102 S.Ct. 2308 , 73 L.Ed.2d 1309 (1982);
United States v. Kibler,
667 F.2d 452, 454-55 (4th Cir.),
cert. denied,
456 U.S. 961 , 102 S.Ct. 2037 , 72 L.Ed.2d 485 (1982);
United States v. Tedesco,
635 F.2d 902, 904-06 (1st Cir.1980),
cert. denied,
452 U.S. 962 , 101 S.Ct. 3112 , 69 L.Ed.2d 974 (1981);
United States v. O’Donnell,
510 F.2d 1190, 1192-95 (6th Cir.),
cert. denied,
421 U.S. 1001 , 95 S.Ct. 2400 , 44 L.Ed.2d 668 (1975). The Circuit for the District of Columbia alone has ruled that venue lies where the acts taken to obstruct justice occurred, in a case decided twenty years ago without the benefit of the views of the circuits which have since ruled to reject that view.
See United States v. Swann,
441 F.2d 1053, 1055 (D.C.Cir.1971).
27
The courts which have ruled that the crime of obstruction of justice occurs where the obstructed proceedings took place have reasoned that the language of 18 U.S.C. § 1503 indicates that the primary concern of Congress was the effect of the obstruction on the proceedings in question.
28
See United States v. Johnson,
713 F.2d 654, 659 (11th Cir.1983),
cert. denied,
465 U.S. 1030 , 104 S.Ct. 1295 , 79 L.Ed.2d 695 (1984);
Barham,
666 F.2d at 523-24 ;
Tedesco,
635 F.2d at 905 . In addition, it has been reasoned that the obstruction of justice statute grew out of the contempt powers afforded courts by the Judiciary Act of 1789, ch. 20, § 17, 1 Stat. 73 , 83 (1789), which powers were lodged with the court in which the proceedings took place.
See Reed,
773 F.2d at 485-86 ;
Kibler,
667 F.2d at 454-55 ;
Tedesco,
635 F.2d at 905-06 .
In light of the formidable authority holding that venue for obstruction lies in the district in which the obstructed proceedings took place and in light of the fact that the allegedly obstructed proceedings in the instant case took place within this district, Eisenberg’s motion for a change of venue is denied.
29
III. Motion for Severance
Eisenberg, joined by Bertoli, moves for severance from Cannistraro pursuant to Fed.R.Crim.P. 14, which provides: “If it appears that a defendant is prejudiced by a joinder of offenses or of defendants in an indictment ..., the court may order ... separate trials of counts, grant a severance of defendants or provide whatever other relief justice requires.” Fed. R.Crim.P. 14. Eisenberg argues that severance is warranted in light of the “likelihood of prejudice to be caused by the introduction of Cannistraro’s prior guilty plea [to the 1987 Indictment].” Eisenberg Brief at 6. Because Eisenberg and Bertoli have not shown they will be substantially prejudiced if they are tried with Cannistraro, the severance motion is denied.
United States v. Gorecki,
813 F.2d 40, 43 (3d Cir.1987).
Although the motion is made under Fed. R.Crim.P. 14, Fed.R.Crim.P. 8 of the Feder
*696
al Rules of Criminal Procedure merits consideration. Rule 8 permits joinder of offenses and defendants.
30
Joinder of offenses and defendants promotes economy of judicial and prosecutorial resources, as well as the public interest in avoiding expensive and duplicative trials.
United States v. Lane,
474 U.S. 438, 449 , 106 S.Ct. 725, 732 , 88 L.Ed.2d 814 ,
reh’g denied,
475 U.S. 1104 , 106 S.Ct. 1507 , 89 L.Ed.2d 907 (1986);
Gorecki,
813 F.2d at 42 ;
United States v. Jackson,
649 F.2d 967, 973 (3d Cir.),
cert. denied,
454 U.S. 1034 , 102 S.Ct. 574 , 70 L.Ed.2d 479 (1981). When distinct offenses have both a logical and temporal relationship, joinder permits the Government to present its evidence in an efficient manner. Such evidentiary overlap “strongly counsels in favor of joinder.”
United States v. McDonnell,
699 F.Supp. 1348, 1351 (N.D.Ill.1988) (citing
United States v. Shue,
766 F.2d 1122, 1134 (7th Cir.1985),
cert. denied,
484 U.S. 956 , 108 S.Ct. 351 , 98 L.Ed.2d 376 (1987)).
31
This rationale applies with equal force to the joinder of defendants.
United States v. Dickens,
695 F.2d 765, 778-79 (3d Cir.1982),
cert. denied sub nom.,
460 U.S. 1092 , 103 S.Ct. 1792 , 76 L.Ed.2d 359 (1983).
When, as here, the literal requirements of Rule 8 are met, a presumption arises in favor of joinder.
See United States v. Swift,
809 F.2d 320, 322 (6th Cir.1987) (Rule 8(b) “can, and should, be ‘broadly construed in favor of initial joinder’----”) (quoting
United States v. Isaacs,
493 F.2d 1124, 1158 (7th Cir.),
cert. denied,
417 U.S. 976 , 94 S.Ct. 3184 , 41 L.Ed.2d 1146 (1974)). Indeed, there is a presumption against severance because it is “assum[ed] that closely related charges are being tried together____”
United States v. Velasquez,
772 F.2d 1348, 1355-56 (7th Cir.1985),
cert. denied,
475 U.S. 1021 , 106 S.Ct. 1211 , 89 L.Ed.2d 323 (1986);
see United States v. Serubo,
604 F.2d 807, 819 (3d Cir.1979);
United States v. Wofford,
562 F.2d 582, 585 (8th Cir.1977) (“Ordinarily, if defendants are jointly indicted and similar evidence from the related series of events is used to convict each defendant, the defendants should be tried together.”),
cert. denied,
435 U.S. 916 , 98 S.Ct. 1471 , 55 L.Ed.2d 507 (1978).
If, however, offenses or defendants have been improperly joined, severance is required as a matter of law under Rule 8.
United States v. Andrews,
765 F.2d 1491, 1496 (11th Cir.1985) (“Misjoinder under Rule 8(b) is prejudicial per se____”),
cert. denied sub nom.,
474 U.S. 1064 , 106 S.Ct. 815 , 88 L.Ed.2d 789 (1986);
United States v. Bledsoe,
674 F.2d 647, 654 (8th Cir.) (“[Mjisjoinder of defendants is inherently prejudicial.”),
cert. denied sub nom.,
459 U.S. 1040 , 103 S.Ct. 456 , 74 L.Ed.2d 608 (1982);
Vastola,
670 F.Supp. at 1261 (citing
United States v. Somers,
496 F.2d 723, 729 (3d Cir.),
cert. denied,
419 U.S. 832 , 95 S.Ct. 56 , 42 L.Ed.2d 58 (1974)).
When a series of offenses are joined in one indictment or multiple defendants are jointly charged with a single offense, “[s]ome prejudice almost necessarily results.”
Vastola,
670 F.Supp. at 1261 (quoting
Cupo v. United States,
359 F.2d 990, 993 (D.C.Cir.1966),
cert. denied,
385 U.S. 1013 , 87 S.Ct. 723 , 17 L.Ed.2d 549 (1967)). This level of prejudice, however, is permissible so long as the technical strictures of Rule 8 are met. Thus, Rule 8(b) is
*697
generally satisfied if the indictment charges a single conspiracy.
United States v. Cole,
717 F.Supp. 309, 317 (E.D.Pa.1989);
United States v. Di Pasquale,
561 F.Supp. 1338, 1347 (E.D.Pa. 1983),
aff'd,
740 F.2d 1282 (3d Cir.1984),
cert. denied,
469 U.S. 1228 , 105 S.Ct. 1226 , 84 L.Ed.2d 364 (1985).
As noted above, Eisenberg, joined by Bertoli, does not contest joinder under Rule 8. Rather, he argues joinder would be unduly prejudicial under Rule 14. Severance under Rule 14 is within the sound discretion of the trial court.
United States v. Boyd,
595 F.2d 120, 125 (3d Cir.1978).
Rule 14 authorizes a trial court to sever counts or defendants where, despite an indictment’s technical compliance with Rule 8, joinder would result in a “manifestly unfair trial.”
Vastola,
670 F.Supp. at 1261 (citing
United States v. Reicherter,
647 F.2d 397, 400 (3d Cir.1981)). Defendants bear a heavy burden when they move for severance under Rule 14. See
United States v. Sandini,
888 F.2d 300, 305 (3d Cir.1989),
cert. denied,
— U.S. -, 110 S.Ct. 1831 , 108 L.Ed.2d 959 (1990);
United States v. Friedman,
854 F.2d 535, 563 (2d Cir.1988),
cert. denied sub nom.,
490 U.S. 1004 , 109 S.Ct. 1637 , 104 L.Ed.2d 153 (1989);
United States v. De Peri,
778 F.2d 963, 983 (3d Cir.1985),
cert. denied sub nom.,
475 U.S. 1110 , 106 S.Ct. 1518 , 89 L.Ed.2d 916 (1986);
Di Pasquale,
740 F.2d at 1293. Mere allegations of prejudice are insufficient to meet this burden. Defendants must “demonstrate clear and substantial prejudice.”
Gorecki,
813 F.2d at 43 (quoting
United States v. Sebetich,
776 F.2d 412, 427 (3d Cir.1985));
United States v. Wright-Barker,
784 F.2d 161, 175 (3d Cir.1986).
Eisenberg states that the Government intends to offer into evidence at a joint trial Cannistraro’s judgment of conviction, guilty plea and allocution relative to the 1987 Indictment, during which allocution Cannistraro mentioned Eisenberg.
32
Eisenberg Brief at 3. He argues: “It is inconceivable that knowledge of Cannistraro’s prior conviction would not play some significant part in the decision of at least some of the jurors.”
Id.
Eisenberg argues Cannistraro’s allocution constitutes a confession and admission of such allocution at a joint trial would violate his Sixth Amendment right to confront his accuser, under the rule announced in
Bruton v. United States,
391 U.S. 123 , 88 S.Ct. 1620 , 20 L.Ed.2d 476 (1968) and its progeny.
In
Bruton ,
a defendant, Bruton, and his co-defendant were jointly tried for armed postal robbery. A postal inspector testified that the co-defendant confessed to him that he and Bruton had committed the crime. The testimony was admissible only against the confessing co-defendant under an exception to the hearsay rule and accordingly the trial court gave a limiting instruction to the jury that the hearsay was not to be considered against the defendant.
Id.
at 27. The Supreme Court held, however, that because the co-defendant did not take
*698
the stand, Bruton’s right to confront his accuser was violated. In addition, the Supreme Court held that even though a limiting instruction had been given to the jury, the threat that Bruton would be convicted on the strength of hearsay evidence was too great to be borne. The Court ruled that the admission of the testimony was prejudicial error.
In response to Eisenberg’s argument, the Government agrees that Cannistraro’s allocution is the equivalent of a confession. Government Brief at 98. However, it represents: “If Cannistraro’s guilty plea and allocution are introduced at trial, they will be introduced against Cannistraro without any mention of Eisenberg or Bertoli. Thus,
Bruton
will not be implicated, and Eisenberg and Bertoli will not be ‘substantially prejudiced’ because the statements will not be ‘powerfully’ or ‘facially’ incriminating of them.”
Id.
at 102. It asserts its offer is consistent with the Supreme Court’s holding in
Richardson v. Marsh,
481 U.S. 200 , 107 S.Ct. 1702 , 95 L.Ed.2d 176 (1987).
In
Richardson ,
the Supreme Court stated: “We hold that the Confrontation Clause is not violated by the admission of a nontestifying codefendant’s confession with a proper limiting instruction when, as here, the confession with a proper limiting instruction when, as here, the confession is redacted to eliminate not only the defendant’s name, but any reference to his or her existence.”
Id.
at 211 , 107 S.Ct. at 1709 . The Supreme Court approved redaction as a method of preserving a defendant’s Sixth Amendment rights while preserving the state’s interest in joint trials:
It would impair both the efficiency and the fairness of the criminal justice system to require, in all these cases of joint crimes where incriminating statements exist, that prosecutors bring separate proceedings, presenting the same evi-
dence again and again, requiring victims and witnesses to repeat the inconvenience (and sometimes trauma) of testifying, and randomly favoring the last-tried defendants who have the advantage of knowing the prosecution’s case beforehand. Joint trials generally serve the interests of justice by avoiding inconsistent verdicts and enabling more accurate assessment of relative culpability — advantages which sometimes operate to the defendant’s benefit. Even apart from these tactical considerations, joint trials generally serve the interests of justice by avoiding the scandal and inequity of inconsistent verdicts. The other way of assuring compliance with an expansive
Bruton
rule [other than redaction] would be to forgo use of codefendant confessions. That price also is too high, since confessions “are more than merely ‘desirable’; they are essential to society’s compelling interest in finding, convicting, and punishing those who violate the law.”
Id.
481 U.S. at 210 , 107 S.Ct. at 1708-09 (footnote omitted) (quoting
Moran v. Burbine,
475 U.S. 412, 426 , 106 S.Ct. 1135, 1143 , 89 L.Ed.2d 410 (1986)).
Redaction is an appropriate method of protecting the Sixth Amendment rights of both Eisenberg and Bertoli. Neither Eisenberg nor Bertoli have submitted any reply to the Government’s argument to dispute this.
33
In light of the Government’s representation that it will make appropriate redactions if it determines to offer into evidence Cannistraro’s guilty plea and allocution testimony, the motion for severance is denied.
IV. Motion to Strike Surplusage
Bertoli moves pursuant to Fed. R.Crim.P. 7(d)
34
to strike certain phrases in the Superseding Indictment as surplusage. Bertoli seeks an order striking certain
*699
“catch-all” phrases from the Superseding Indictment as follows:
Defendant Bertoli moves to strike certain language from the indictment which could prove unfairly prejudicial. Specifically, defendant Bertoli requests that the [cjourt strike the word “among” in Paragraph 8 of the First Court [sic]
{“among
the means and methods by which the defendants ... achieve the purpose of the racketeering activity and conducted and participated in the affairs of the enterprise were the following: ____”); the term “elsewhere” throughout the indictment with respect to both where the alleged racketeering acts occurred and with respect to where the defendants maintained nominee accounts; the term “among other things” in describing the false and misleading aspects of the research reports referred to in the indictment; the term “others” in almost every paragraph in the indictment to refer to co-conspirators and those people with whom the Government alleges the [Defendants participated in the alleged racketeering activity; and the term “among other things” as used to describe the areas investigated by the grand juries empaneled in New Jersey to investigate the charges in the instant indictment.
Bertoli Discovery Brief at 26. He argues such phrases have no purpose other than to “create an impression in the minds of the jurors that the [Defendants were involved in a much broader conspiracy.” Id. at 28. In addition Bertoli seeks the striking of mention in paragraph 4 of Count 1 that Bertoli “was the former president of a brokerage firm who, in 1979, was permanently barred by the [SEC] from associating with any brokerage firm.” He argues his past employment is irrelevant and the reference to the previous sanction is prejudicial. Bertoli Discovery Brief at 28. He also seeks to have the terms “bribes” and “bribery,” used in the Superseding Indictment to describe the illicit scheme involving the portfolio managers and the research analyst, stricken as implying crimes which are not charged and as being “unnecessarily inflammatory.”
Id.
Finally, he seeks to have paragraph 54 of the Superseding Indictment, relating to the amount of profit reaped by the Defendants through the Beneficial Owners Concealment Scheme described in paragraphs 50 through 53 of the Superseding Indictment,
35
and racketeering
*700
acts 5(e) and 5(f),
36
referring to two predicate acts of mail fraud, stricken as irrelevant to the scheme charged and as prejudicial surplusage.
Id.
at 29.
It is well-settled that a motion to strike surplusage from an indictment may be granted only if the challenged allegations are not relevant to the charges and are inflammatory and prejudicial.
United States v. Huppert,
917 F.2d 507, 511 (11th Cir.1990);
United States v. Terrigno,
838 F.2d 371, 373 (9th Cir.1988);
United States v. Fahey,
769 F.2d 829, 841-42 (1st Cir. 1985);
United States v. Bullock,
451 F.2d 884, 888 (5th Cir.1971);
United States v. Wecker,
620 F.Supp. 1002, 1006 (D.Del. 1985) (quoting
Fischbach & Moore, Inc.,
576 F.Supp. at 1398 );
United States v. DePalma,
461 F.Supp. 778, 797 (S.D.N.Y.1978). It is an exacting standard which is met only in rare cases.
Huppert,
917 F.2d at 511 ;
Wecker,
620 F.Supp. at 1006 ;
Fischbach & Moore, Inc.,
576 F.Supp. at 1398 ;
DePalma,
461 F.Supp. at 797 .
In the instant case, the Government asserts that the catch-all phrase “among” within the phrase “among the means and methods” in paragraph 8 of Count 1 of the Superseding Indictment
“accurately
indicates that the [Defendants used means and methods” other than those enumerated in racketeering acts 8(a) through 8(f). Government Brief at 106 (emphasis added). As to the term “elsewhere,” the Government asserts the proof at trial will include evidence that certain activities charged in the Superseding Indictment occurred outside of New Jersey.
Id.
at 107. It adds that the term “among other things,” as used to describe the false and misleading aspects of the various research reports referred to in the Superseding Indictment and the matters investigated by the grand juries empaneled in this District, accurately reflects the fact that the proof at trial will include evidence of fraudulent aspects of the research reports not specifically listed in the Superseding Indictment and matters investigated by the grand juries relative to the Cover-Up Scheme.
Id.
at 108-09. As to the term “and others,” referring to co-conspirators and co-racketeers, the Government asserts this phrase reflects evidence which will be included in the proof at trial in fleshing out the racketeering schemes alleged in Counts 1 and 2, the conspiracy alleged in Count 3 and the obstructions of justice alleged in Counts 4 through 6.
Id.
at 111.
These phrases relate to the proof the Government will present at trial. As such, they are relevant and, as innocuous, non-pejorative terms, non-prejudicial. As one court has stated, such terms
only refer[] to the proof of the crimes, and sérve[] as a device to allow the government to prove more than that alleged in the indictment. If the government were required to detail
all
of its proof in an indictment, rather than the portions they include now, the indictments in many cases would resemble books.
United States v. Climatemp, Inc.,
482 F.Supp. 376, 392 (N.D.Ill.1979) (emphasis in original),
aff'd without opinion sub nom.,
705 F.2d 461 (7th Cir.),
cert. denied sub nom.,
462 U.S. 1134 , 103 S.Ct. 3116 , 77 L.Ed.2d 1370 (1983).
As to the reference in the Superseding Indictment to the fact that Bertoli was permanently barred by the SEC
*701
from associating with any brokerage firm, the Government asserts this reference is relevant because it explains the motivation of the Defendants for engaging in the Beneficial Owners Concealment Scheme, whereby Bertoli’s status as the promoter of High Tech was concealed.
Id.
at 112-13. In addition, it argues the terms “bribes” and “bribery” are used in the Superseding Indictment as an accurate description of the
quid pro quo
established by the Defendants with the M & I Fund and Bullock Fund portfolio managers and the Hallswell research analyst, are not meant to connote the uncharged crime of bribery and will not be understood by the jury as such.
Id.
at 114-15. Finally, as to paragraph 54 and racketeering acts 5(e) and 5(f), the Government asserts paragraph 54 is relevant because the Beneficial Owners Concealment Scheme was consummated by the sale of the High Tech stock, to the profit of the Defendants.
Id.
at 116. In addition, it alleges racketeering acts 5(e) and 5(f) relate to the transfer by the Defendants of the proceeds of the High Tech stock sale to the Cayman Islands, which transfer constituted part of the Beneficial Owners Concealment Scheme.
Id.
at 117.
It is clear from their context within the Superseding Indictment that the terms “bribes” and “bribery” are accurately used to connote the
quid pro quo
established between the Defendants and the M & I Fund and Bullock Fund portfolio managers and the Hallswell research analyst and not to connote the uncharged crime of bribery. For example, in describing the LCI Scheme, the Superseding Indictment refers to “bribery of individuals to cause the purchase of large blocks of LCI securities.” Superseding Indictment, ¶ 28. In the next paragraph, the Superseding Indictment fleshes out the meaning of “bribery” as follows: “In exchange [for the deposit of the proceeds from the fraudulent trading of LCI and Toxic Waste securities] into their Monarch accounts the M & I [Fund] and Bullock [Fund portfolio managers] caused their respective funds to purchase large blocks of LCI securities, and the [Hallswell research analyst] caused Hallswell to open a brokerage account at Monarch that purchased a large block of LCI securities.”
Id.,
¶ 29. The term “bribery” accurately describes the nature of the agreement reached between the Defendants and the M & I Fund and Bullock Fund portfolio managers and the Hallswell research analyst. This agreement is an integral part of the schemes alleged in the Superseding Indictment; the term “bribes” and “bribery” are not stricken.
Paragraph 54, relating to the proceeds received by the Defendants from the consummation of the Beneficial Owners Concealment Scheme, is not stricken because it may be relevant to motive and intent.
See Terrigno,
838 F.2d at 373 ;
Wecker,
620 F.Supp. at 1006 ;
United States v. Krasnoff,
480 F.Supp. 723, 730 (S.D.N.Y.1979). As to racketeering acts 5(e) and 5(f), the Government represents they relate to the Defendants’ transfer of racketeering proceeds to the Cayman Islands. As well as being relevant simply by virtue of constituting part of the Beneficial Owners Concealment Scheme, such transfer of money may also be relevant to intent. These allegations relating to the transfer are not stricken.
For the foregoing reasons, the motion of Bertoli to strike surplusage is denied.
V. Motions to Dismiss and for Discovery Based on Allegations of Prosecutorial Misconduct
Bertoli moves to dismiss the Superseding Indictment on the grounds of prosecutorial misconduct, or in the alternative, for discovery.
37
Bertoli argues as to the alleged prosecutorial conduct: “Although few, if any, of the grounds raised have ever been
*702
the basis for dismissal of an indictment in and of themselves, their accumulation in one case reveals a certain overzealousness which warrants, at the least,
in camera
review by the [c]ourt of the grand jury records.” Bertoli Prosecutorial Misconduct Brief at 3.
A.
Motions to Dismiss and for Discovery Based on Specific Allegations of Prosecutorial Misconduct
1. Alleged Failure to Obtain Approval of the RICO Charges
Counsel for Bertoli asserts that “[o]n information and belief, the United States Attorney’s Office for the District of New Jersey did not obtain written approval from the Organized Crime & Racketeering Section, Criminal Division, United States Justice Department prior to presenting the indictment in
United States v. Eisenberg, et al.,
Criminal No. 89-218 to the grand jury.” First Tolomeo Cert., 11 5. Tolomeo asserted at oral argument on the instant motions, held on 3 July 1991, that her source for such information was obtained from an individual whose identity she was not willing to disclose. She stated she was not willing to make such disclosure due to a personal commitment to the individual, although she acknowledged that such nondisclosure was not based on any privilege.
Tolomeo was advised that more concrete substantiation of the allegations concerning violation by the Government of guidelines pertaining to RICO indictments would be needed. Tolomeo stated she would submit for
in camera
review such substantiation.
See
3 July 1991 Tr. at 11-12. However, on 24 July 1991, twenty-one days after oral argument was held, Tolomeo advised the court she was not at liberty to disclose the basis for Bertoli’s allegations concerning failure to obtain the written approval of the Justice Department for the RICO charges due to personal commitments to her informants.
See
24 July 1991 Tolomeo Letter to the Court.
38
United States Department of Justice Guidelines require prior approval of a RICO charge.
39
However, these guidelines do not require written approval to be obtained, as suggested by Bertoli.
In response, the Government submits the affidavit of David M. Rosenfield (“Rosenfield”), Special Assistant United States Attorney. Rosenfield states:
The U.S. Attorney’s Office for the District of New Jersey did not violate United States Department of Justice guidelines governing the commencement of RICO prosecutions, in connection with this case. In fact, both the proposed Indictment and proposed Superseding Indictment in this case were sent to, and approved by, the Organized Crime and Racketeering Section, Criminal Division, of the United States Department of Justice in Washington, D.C., prior to the actual return of the Indictments by the indicting federal grand jury in Newark, New Jersey.
Rosenfield Aff., 117.
Given that the guidelines cited by Bertoli do not require written approval, Bertoli has not even adequately alleged (much more demonstrated) a violation by the Government of such guidelines. In addition, Bertoli does not adequately rebut the representation made by the Govern
*703
ment that it obtained the requisite approval prior to bringing the RICO charges contained in the Superseding Indictment against the Defendants. Finally, even if Bertoli had substantiated that the Government violated the guidelines, violation of such guidelines would not form the basis for dismissal of the Superseding Indictment.
See United States v. Caceres,
440 U.S. 741 , 99 S.Ct. 1465 , 59 L.Ed.2d 733 (1979).
Bertoli admits “it is doubtful [under
Ca
ceres] that dismissal of the indictment for failure to follow the Guidelines would be appropriate.” Bertoli Prosecutorial Misconduct Brief at 6. He argues, however: “Nevertheless, the thrust of defendant Bertoli’s argument is not that the failure to obtain written RICO desk clearance preindictment is, of itself, enough to warrant dismissal of the indictment. Rather, his argument is that the accumulation of abuses by the prosecutors in this case warrants dismissal.”
Id.
Bertoli’s motion based on cumulative alleged prosecutorial misconduct is denied.
See infra
at 713.
2. Alleged Conflict of Interest
Bertoli asserts Rosenfield, one of the United States Attorneys prosecuting the instant case, is operating under a conflict of interest. Bertoli Prosecutorial Misconduct Brief at 10. He asserts Rosenfield was employed by the SEC and was actively involved in the proceedings relative to the SEC Civil Action and has been sworn in as a Special Assistant United States Attorney to assist with this case.
Id.
In addition, Tolomeo, counsel for Bertoli, states: “On information and belief, ... [Rosenfield] elicited and presented ... testimony to the grand jury. No other Government attorneys or agents were present in the grand jury proceedings [at the time].” Supp.Tolomeo Aff., ¶1¶ 2-3. Bertoli seeks the following: “[Discovery of information as to Mr. Rosenfield’s role and position as both an S.E.C. Attorney and as a Special Assistant United States Attorney in order to support his motion to dismiss the indictment on the grounds that Mr. Rosenfield had an impermissible conflict of interest in representing the Justice Department in the grand jury proceedings in this case.”
Id.
In addition, Bertoli states “Philip Giordano shared Mr. Rosenfield’s status. Accordingly, defendant Bertoli’s discovery request is tailored to elicit information as to Mr. Giordano as well as Mr. Rosenfield.”
Id.
at 10 n. 3.
Rosenfield states in his affidavit that he was a staff attorney in the Division of Enforcement of the SEC in Washington, D.C. from May 1987 through December 1987, and as such, worked on the SEC Civil Action against the Defendants. Rosenfield Aff., 1111 3-4. He states that prior to leaving the SEC to become a Special Assistant United States Attorney, he entered into an agreement with the SEC that he would not participate in the SEC Civil Action if he were to return to the SEC following a departure from the Office of the United States Attorney.
Id.,
¶ 5. In addition, he states he has not participated in the SEC Civil Action since becoming a Special Assistant United States Attorney.
Id.,
116. The Government provided no information with respect to Philip Giordano (“Giordano”).
As to Rosenfield, the Government argues no impermissible conflict of interest is present in light of the Third Circuit’s decision in
United States v. Birdman,
602 F.2d 547 (3d Cir.1979),
cert. denied,
444 U.S. 1032 , 100 S.Ct. 703 , 62 L.Ed.2d 668 (1980). In
Birdman ,
Dennis Taylor (“Taylor”), an attorney for the SEC, directed the SEC’s investigation of the defendant (the “SEC Action”) for a period of approximately two years. At the culmination of the two years, the Justice Department initiated criminal prosecutions of several subjects of the SEC investigation, including a prosecution of the defendant (the “Criminal Action”). Taylor was appointed as a Special Assistant United States Attorney and conducted the grand jury proceedings relative to the Criminal Action.
During his tenure as Special Assistant United States Attorney, Taylor remained on the SEC payroll and continued to act as the SEC’s attorney in matters related to the SEC Action. The defendant argued
*704
that a conflict of interest existed by virtue of Taylor’s dual role as an attorney for the SEC in the SEC Action and as a Special Assistant United States Attorney for the Justice Department in the Criminal Action. The Third Circuit ruled no conflict of interest inhered in a dual role by a government attorney, recognizing the policy favoring intragovernmental cooperation.
Id.
at 562-63 . In addition, the court observed that “abuse of an attorney’s dual employment status might be shown in particular cases, especially where the agency uses the grand jury investigation to gather information for civil administrative proceedings to which it would not otherwise have access.”
Id.
at 563 . However, it denied the defendant’s motion to dismiss the indictment based on the purported conflict of interest, finding the record did not support any such allegations of abuse.
Id.
Bertoli acknowledges the precedential value of
Birdman
in the Bertoli Prosecutorial Misconduct Brief. He argues, however, the applicability of
Birdman
should be reexamined in light of the Supreme Court’s holding in
Young v. United States,
481 U.S. 787 , 107 S.Ct. 2124 , 95 L.Ed.2d 740 (1987). In
Young ,
the plaintiff’s attorney in a trademark infringement civil action obtained an injunction against the defendant restraining the defendant from further infringement. After it appeared the injunction was violated by the defendant, the court agreed, at the request of the plaintiff’s attorney, to appoint the plaintiff’s attorney as Special Assistant United States Attorney to prosecute a criminal contempt action for violation of the injunction.
On appeal, the Supreme Court agreed with the defendant’s argument that the assumption by the plaintiff’s attorney of the role of Special Assistant United States Attorney, in proceedings initiated to enforce a court order benefitting the plaintiff, created the appearance of impropriety on the part of the attorney.
Id.
at 805 , 107 S.Ct. at 2136. In addition, it held harmless error analysis did not apply to the court’s decision to appoint an interested attorney as Special Assistant United States Attorney because the error was “so fundamental and pervasive that [it] required] reversal without regard to the facts or circumstances or the particular case.”
Id.
at 809-10, 107 S.Ct. at 2139.
Since
Young ,
it appears only two circuit courts, the Ninth and the Fifth Circuits, have considered the application of
Young
in a context involving Government, not private, attorneys serving in dual capacities. In
Federal Trade Commission v. American National Cellular,
868 F.2d 315 (9th Cir.1989), the Ninth Circuit considered whether
Young
operated to bar the appointment of an attorney for the Federal Trade Commission (the “FTC”), who had participated in FTC civil proceedings against the defendants, from acting as Special Assistant United States Attorney for the Government in the criminal contempt proceedings arising out of action taken in the FTC proceedings. The Ninth Circuit distinguished
American National Cellular
from
Young
because
Young
involved the appointment of a
private
attorney, where there existed the potential for a financial conflict of interest.
Id.
at 319. The court stated: “We doubt the Supreme Court intended
\Young~\
to disqualify automatically any FTC attorney as ‘interested’ simply by virtue of employment with the agency that brought the underlying suit.”
Id.
The court therefore rejected a
per se
rule barring dual representation by Government attorneys, but stated under certain circumstances “a [Government attorney may lack the impartiality and appearance of impartiality that our system of justice demands of its prosecutors.”
Id.
The court rejected the FTC’s argument that “[G]overnment attorneys are basically fungible, united in their vision of the public interest, such that no conflicts of interest, or intolerable appearances of such conflicts, could arise.”
Id.
It observed:
Casting [G]overnment attorneys into adversarial roles in civil litigation results in vigorous advocacy for their client, the United States Government. Such vigor may cloud the attorneys’ ability to distinguish between contempt prosecutions that further their purported primary objective — compliance with the court’s or
*705
der — and those that are driven by a primary motive to further the goals of the underlying litigation. For example, [Government attorneys may be tempted to pursue a nonmeritorious contempt prosecution because the prosecution would allow them to obtain documents or access to information useful in the underlying civil litigation. They may also be tempted to abandon, press or compromise a prosecution wholly apart from its merits to leverage settlement in the underlying litigation. If their perspective is colored by involvement with the underlying civil action, then they more closely resemble the “interested parties” in
[Young
] than impartial U.S. Attorneys.
Id.
The court held two factors must be reviewed in order to ascertain whether an impermissible conflict of interest or the appearance of an impermissible conflict is present. First, the level of control by the Office of the United States Attorney must be ascertained, because a high level of involvement by that office may render harmless any conflict of interest by the Special Assistant United States Attorney.
Id.
at 320. Second, the level of involvement by the Special Assistant United States Attorney in the underlying civil action must be ascertained.
Id.
The court was persuaded that no impermissible conflict or the appearance thereof was present in
American National Cellular ,
given that the Assistant United States Attorney accompanied the Special Assistant United States Attorney in the contempt proceedings and the level of involvement by the Special Assistant United States Attorney in the underlying FTC civil action was not high.
Id.
In
United States ex rel. Securities and Exchange Commission v. Carter,
907 F.2d 484 (5th Cir.1990), the SEC obtained an injunction against the defendants restraining them from violating anti-fraud and registration provisions of the securities laws. Several months later, the court appointed an SEC attorney to serve as a Special Assistant United States At

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/1607985. Public record. Not legal advice.