# Petition — Ostrer v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_1854%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1979 - **Citation:** 439 U.S. 1115 ## Text a reme Court, U.S I es OCT 10.1973 In the | MIAHAFL RODAK -, Supreme Court of the United States. OcrosBer TERM, 1978. No. i LOUIS OSTRER, PETITIONER, UNITED STATES OF AMERICA, RESPONDENT. Petition for a Writ of Certiorari to the United States Court of Appeals for the Second Circuit. ALAN DERSHOWITZ, 20 Elmwood Avenue, Cambridge, Massachusetts 02138. Counsel for Petitioner. Of Counsel: Harvey A. SILVERGLATE, ANN LAMBERT GREENBLATT, SILVERGLATE, SHAPIRO & GERTNER, 217 Lewis Wharf, Boston, Massachusetts 02110. BATEMAN & SLADE, INC. BOSTON , MASSACHUSETTS. Table of Contents. Opinions below Jurisdiction and proceedings below Constitutional provision involved Questions presented Introductory statement Statement of facts Findings of the District Court 1. Natco/Merchandise Plus bankruptcy fraud 2. Hellerman’s trip to Switzerland 3. Reducticn in Hellerman’s legal fee 4. Hellerman’s “restitution” Conclusions of the District Court The Court of Appeals’ opinion Reasons for granting the writ A. The Second Circuit’s treatment of the corrupt practices found by the District Judge, and the injustice inflicted on the Petitioner, are in stark conflict with the more stringent standards set and enforced by every other circuit, and is even in conflict with the Second Circuit’s own treat- ment of prior, less egregious cases, where the reputation of a high prosecutorial official was not so clearly at stake B. The legal standards announced by the ma- J jority of the panel below have ominous implica- tions for the integrity of the criminal justice system in the Second Circuit Conclusion Dwwon WY 29 ii TABLE OF CONTENTS. Appendix A la Appendix B 47a Appendix C 64a Table of Authorities Cited. CASES. Annunziato v. Manson, 566 F. 2d 410 (2d Cir. 1977) 27 Blankenship v. Estelle, 545 F. 2d 510 (5th Cir. 1977) 26 Brady v. Maryland, 373 U.S. 83 (1963) 3, 6, 8, 9, 10, 14, 17 et seq. Cannon v. State of Alabama, 558 F. 2d 1211 (5th Cir. 1977) 33n Dupart v. United States, 541 F. 2d 1148 (5th Cir. 1976) 26 Giglio v. United States, 405 U.S. 150 (1972) 26n McNabb v. United States, 318 U.S. 332 (1943) 34 Mesarosh v. United States, 352 U.S. 1 (1956) 34 Ostrer v. United States, 430 U.S. 946 (1977) 2 Ostrer v. United States, 577 F. 2d 782 (2d Cir. 1978) $. 3, 27 United States v. Agurs, 427 U.S. 97 (1976) 5, 10, 17, 25, 26n, 30, 31, et seq. United States v. Badalamente, 507 F. 2d 12 (2d Cir. 1974), cert. denied, 421 U.S. 911 (1975) 28 United States v. Brawer, 482 F. 2d 117 (2d Cir. 1973) 29n United States v. Butler, 567 F. 2d 885 (9th Cir. 1978) 27 TABLE OF AUTHORITIES CITED. iii United States v. Dioguardi, 492 F. 2d 70 (2d Cir. 1974) 2 United States v. Franzese, 392 F. 2d 954 (2d Cir. 1968) 28 United States v. Garza, 574 F. 2d 298 (5th Cir. 1978) 27 United States v. Johnson, 327 U.S. 106 (1946) 28n United States v. Leja, 568 F. 2d 493 (6th Cir. 1977) 27 United States v. Librach, 520 F. 2d 550 (8th Cir. 1975) 27 United States v. McCrane, 527 F. 2d 906 (3d Cir. 1975), vacated and remanded, 427 U.S. 909 (1976), on remand, 547 F. 2d 204 (3d Cir. 1976) 26 United States v. Ostrer, 419 U.S. 829 (1974) 2 United States v. Ostrer, 422 F. Supp. 93 (S.D. N.Y. 1976) 2, 20n United States v. Sanfilippo, 564 F. 2d 176 (5th Cir. 1977) 27 United States v. Sutton, 542 F. 2d 1239 (4th Cir. 1976) 26 CONSTITUTIONAL AND STATUTORY PROVISIONS. United States Constitution, Fifth Amendment 3 28 U.S.C. § 1254 a § 2255 2,11 In the Supreme Court of the United States. Ocroser TERM, 1978. No. LOUIS OSTRER, PETITIONER, v. UNITED STATES OF AMERICA, RESPONDENT. Petition for a Writ of Certiorari to the United States Court of Appeals for the Second Circuit. Louis Ostrer petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Second Circuit affirming the District Court’s denial of his motion to vacate conviction and sentence. 2 Opinions Below. The opinion of the United States District Court for the Southern District of New York, denying the motion to vacate conviction and sentence, is unreported and is found in Appen- dix A, infra. The opinion of the Court of Appeals is reported at 577 F. 2d 782, and is reproduced in Appendix B, infra. Jurisdiction and Proceedings Below. On January 26, 1973, Petitioner, Louis Ostrer, was con- victed in the District Court for the Southern District of New York after a three-week jury trial on 17 counts involving a stock manipulation. On April 12, 1973, Petitioner was sen- tenced to three years’ imprisonment and a $55,000 fine. On appeal, his conviction was affirmed in a judgment of the United States Court of Appeals for the Second Circuit entered March 1, 1974. United States v. Dioguardi, 492 F. 2d 70. Certiorari was denied on October 15, 1974. United States v. Ostrer, 419 U.S. 829. Subsequently, Ostrer learned that he had been the victim of unlawful electronic surveillance, which resulted in a motion for a new trial. His motion was denied after a hearing. United States v. Ostrer, 422 F. Supp. 93 (1976). The denial was affirmed by the Court of Appeals on the basis of the District Court’s opinion, and a petition for rehearing was denied on December 21, 1976. Certiorari was denied on March 28, 1977. Ostrer v. United States, 430 U.S. 946. The proceedings leading up to the instant petition com- menced with a motion to vacate conviction and sentence filed with the District Court pursuant to 28 U.S.C. § 2255 on April 14, 1977. That court, after an extensive evidentiary hearing, 3 denied the motion on August 12, 1977, after making detailed findings of fact and rulings of law embodied in an unpublished opinion (Appendix A to this petition). The Court of Appeals for the Second Circuit affirmed on April 18, 1978, in a majori- ty opinion (per Mansfield, J., joined by Smith, J.) and a con- curring opinion (Moore, J.). Ostrer v. United States, 577 F. 2d 782. A petition for rehearing with suggestion for re- hearing en banc was denied on July 10, 1978. Petitioner began serving his sentence on May 3, 1978. This petition follows. This Court has jurisdiction to review the judgment below under the provisions of 28 U.S.C. § 1254. Constitutional Provision Involved. Unrrep States CoNSTITUTION, FirrH AMENDMENT. “No person .. . shall . . . be deprived of life, liberty, or property, without due process of law. . ..” Questions Presented. I. Isa due process violation presented, requiring the grant of a new trial, where a United States District Judge has found, after an extensive hearing on a habeas petition, that (A) the Chief of the Criminal Division of the United States Attorney’s Office, by means of a “ruse,” “conscious avoidance,” and “intentional non-compliance” with its Brady obligations, “intentionally eased the way for [the Government's chief and indispensable prosecution wit- 4 ness Michael] Hellerman to benefit from its decision to release the $80,000 in stolen funds,” thereby “inten- tionally allow[ing] the witness to retrieve the $80,000 thus conferring a substantial benefit on him,” and where this activity was carefully and intentionally hidden from the Petitioner’s trial attorney and from the trial judge; and (B) the Government also failed to disclose that it had assisted the witness in obtaining as “a reward for his co- operation” a “rather unusual benefit,” namely, permis- sion from another judge to leave the country on a trip to Switzerland after the witness obtained the aforesaid $80,000 and just before the witness was scheduled to begin serving a prison sentence and to testify at the Peti- tioner’s trial; and (C) the Chief of the Criminal Division, at the witness’ request, made a telephone call to the witness’ lawyer, the foreseeable “result or consequence” of which was “a reduction in [the witness’ legal] fees” from $100,000 to $50,000, and where this activity was not disclosed to defense counsel or the court; and (D) a $12,500 deposit made earlier by the witness into an escrow account meant for the victims of his swindles was, without disclosure, funneled back into the witness’ pocket after his testimony at the defendant’s trial, and an $87,500 balance due on the witness’ restitution obligation was forgiven by the Government, after the trial judge, defense counsel, and the jury at the Petitioner’s trial were led to believe that these funds were paid, and would con- tinue to be paid, for the benefit of the victims? II. Should this Court, under its supervisory jurisdiction over the operations of the Federal Judiciary, order that the 5 Petitioner be granted a new trial for the reasons stated in Question I, supra? III. Can suppression of clear, unambiguous evidence of serious corrupt activity by a high-ranking member of the United States Attorney’s Office, where that activity results in substantial pecuniary and other benefits for a critical prosecu- tion witness, where the benefits are perceived by the witness as a reward for his “cooperation” in the prosecution of the Peti- tioner, where this activity is carefully and intentionally hidden from the trial judge, defense counsel, and the jury, and where it is not contested that the witness’ testimony was a sine qua non for the conviction of the Petitioner, ever be considered harmless or merely cumulative within the meaning of United States v. Agurs, 427 U.S. 97 (1976), simply because the jury had before it other impeachment evidence of the witness’ checkered past and of official (but lawful and ethical) leniency toward him? IV. Should the standards set down in United States v. Agurs, 427 U.S. 97 (1976), for guiding a determination in a post-trial setting as to when a suppression of exculpatory evi- dence at trial should result in reversal of a conviction, be used as a guideline for prosecutors to determine in advance of trial whether certain admittedly exculpatory evidence, in light of the totality of the Government’s anticipated case, can be with- held at no risk to the prosecution? V. May a majority of the members on a three-judge panel of a Court of Appeals hearing Petitioner's habeas appeal ig- nore, distort, and in some instances alter outright the careful findings of a District Judge, who determined after an extensive evidentiary hearing, on the basis of overwhelming and unam- biguous testamentary and documentary evidence, that a theretofore well-regarded former high official in the United States Attorney’s Office had engaged in corrupt and undis- 6 closed practices in dealing with the key prosecution witness responsible for Petitioner’s conviction? Introductory Statement. It is an extremely rare case in which a defendant in a criminal case is found serving a prison sentence after a District Judge has found intentional noncompliance with the Govern- ment’s Brady obligations and a carefully orchestrated cover- up of that noncompliance, where the situation involves activi- ty by a high prosecutorial official and involves the secret and corrupt bestowal on the Government's critical witness of hun- dreds of thousands of dollars’ worth of pecuniary benefits. It is rarer yet for a defendant to be in prison where the only evidence against him came from the mouth of that witness. This is just such a case — probably the most serious Brady violation to come before this Court in recent memory, perhaps ever. This case raises important questions as to the continued vitality of the rule that the prosecutor has a constitutional and ethical duty to disclose to defense counsel and/or to the court evidence of clearly exculpatory dimension. It also raises the issue whether a prosecution obtained entirely on the basis of the testimony of a witness tainted by corrupt and secret prac- tices on the part of a high prosecutorial official can withstand a Due Process attack in a habeas action. Equally important, this case highlights serious questions as to the proper deference which an appellate court must give to the careful findings of a District Judge, who has determined after an extensive evidentiary hearing, on the basis of over- whelming and unambiguous testamentary and documentary evidence, that a theretofore well-regarded former high official in the United States Attorney's Office had engaged in corrupt 7 and undisclosed practices in dealing with the key prosecution witness. (Put differently, it raises the question whether the Petitioner should continue serving a prison sentence because of an appellate court’s choice to rewrite the District Judge’s find- ings, thereby protecting the reputation of a well-regarded former prosecutor.) Finally, this case sets out in bold relief the duty of this Court to exert its supervisory powers over the administration of justice in the lower federal courts in order to discourage and remedy corrupt practices, where it becomes apparent that the Court of Appeals has not faced up to, and corrected, a serious blot on a local United States Attorney’s Office, and a serious injustice to a federal criminal defendant. In the face of a carefully orchestrated effort by a certain person or persons in the Government to coverup the violations around which this case revolves, it was by sheer fortuity that the Petitioner learned about them and was able to bring them to the District Court's attention in his habeas motion. The District Court found, inter alia, the following facts: 1. The Petitioner’s motion arose out of “a single unexpected event,” namely, the publication, by the Government's chief trial witness against the Petitioner, one Michael Hellerman, of a book entitled Wall Street Swindler, which revealed certain facts, previously unknown to defense counsel and to the court, which, counsel realized, if true, “would have been useful to the defense in attacking Hellerman’s creaubility.” (Appendix A, la-3a.') 2. The Petitioner’s “conviction was dependent on Heller- man’s testimony.” (Appendix A, at 4a.) 3. “Ostrer’s trial counsel specifically requested that the Government make available any material bearing adversely ‘Appendix A contains the “Findings and Conclusions” of District Judge Charles E. Brieant, Jr., who conducted an extensive evidentiary hearing on Petitioner's habeas motion. 8 on the credibilty, character or reputation of Hellerman.” (Ap- pendix A, at 3a.) 4. The Chief of the Criminal Division of the United States Attorney’s Office (hereinafter “the Chief”*) participated in and aided a successful effort by Hellerman to obtain for his personal use $80,000 that belonged to the estate of a bankrupt corporation and was owed to its creditors. The Chief of the Criminal Division accomplished this through a ruse. “Having found that but for the Government activity previously de- scribed, Hellerman would not have gained access to the $80,000.00, we are constrained to find that the Government thereby conferred a benefit on its cooperating witness Heller- man which should have been disclosed to the defense.” (Ap- pendix A, at ]4a.) 5. “[T]he Government's failure to alert defense counsel to this matter {of the $80,000] was intentional,” and failure to in- form the defense was purposeful and constituted “intentional non-compliance” with the Brady obligation. (Appendix A, at l4a, 15a.) 6. The Government knowingly conferred yet another benefit on Hellerman when it decided “not to oppose Heller- man’s plans for a trip to Europe while he was awaiting sentence.” (Appendix A, at 18a). “Failing to oppose permis- sion for Hellerman to travel was certainly a reward for his cooperation. . . . The Government should have alerted the defense to Hellerman’s European trip, since it failed to oppose bail enlargement to permit the trip to go forward, a rather unusual benefit under the circumstances of this case.” (Ap- pendix A, at 18a-19a.) * Judge Brieant throughout his long and detailed written findings and con- clusions never once mentioned the name of the prosecutor involved, but rather referred to him simply as “the Chief,” which nomenclature Petitioner has adopted herein. 9 7. “In the logical belief that once the attorney [for Heller- man] was informed of . . . [Hellerman’s] status as a cooperating witness, the fee [being charged Hellerman by his attorney, namely, $100,000] would be substantially reduced, Hellerman asked the Chief to notify the attorney of this fact. The Chief did call the attorney and Hellerman’s fee was sub- sequently reduced by $50,000.00. Hellerman thanked the Chief for his efforts.” (Appendix A, at 22a.) “.. . [T]he result or consequence of the Chief’s call to counsel was a reduction in fees. The Chief may have expected that this would be the result of the call.” (Appendix A, at 22a.) This telephone call was not disclosed to defense counsel. The District Judge, who presided over the evidentiary hear- ing but was not the trial judge in the criminal case, concluded that these and other facts found by him did not require rever- sal of Petitioner's conviction, because the Government had provided defense counsel at trial with other information with which to impeach Hellerman, namely, some of Hellerman’s prior crimes, and hence the Brady material not provided becomes of diluted importance, to the point where, in the Judge’s view, it would not likely have raised a reasonable doubt in the minds of the jurors. (Appendix A, at 44a.) Fur- thermore, ruled the District Judge, this additional suppressed evidence of Government “largesse” toward Hellerman would not “probably” have raised a reasonable doubt, since “the jury was well acquainted with the Government’s lenient treatment of Hellerman.” (Appendix A, at 45a.) On appeal, the Court of Appeals panel affirmed the judg- ment of the District Court. Two judges on that panel, however, substantially ignored, distorted, or altered the careful and well-supported findings of the District Judge, and, in the face of vehement protests by the third panel member at this rewriting of the well-established and unambiguous facts, 10 the majority of the pane! declared that there was neither a Due Process nor any other violation. If left standing, the opinion of the Court of Appeals would all but extinguish the Bra. y* and Agurs* rules in the Second Circuit, for it would establish the proposition that the Govern- ment need not disclose exculpatory evidence to defense counsel or to the court — including evidence of its own corrupt deal- ings with a key prosecution witness — so long as that witness is otherwise sufficiently flawed so that any suppressed impeach- ment material might be seen by an appellate court as merely “cumulative.” An affirmance in this case would, as well, approve holdings by both the District Court and the Court of Appeals to the ef- fect that (1) actions by a prosecutor which only “incidentally” (albeit substantially) benefit a cooperating witness do not con- stitute Brady material and (2) the Government may assist in providing pecuniary benefits (in this case stolen funds) to cooperating witnesses and never disclose those payments, so long as the payments are merely Government “largesse” and are not payments which a defendant has been able to prove were negotiated directly and explicitly in exchange for testimony. If this case is allowed to stand without intervention by this — Court, the incentives for improper prosecutorial actions and inactions, the prospects of a serious erosion of defendants rights to a fair trial, and the dangers of a serious decline in public respect for the federal judiciary, are all abundantly clear. > Brady v. Maryland, 373 U.S. 83 (1963). * United States v. Agurs, 427 U.S. 97 (1976). 1] Statement of Facts. Louis Ostrer was charged in a forty-count indictment with violations of certain provisions of the Federal securities laws, mail fraud, and conspiracy. The trial court ordered acquittals on twenty-three counts. The jury acquitted Ostrer on six counts and convicted him on eleven. Some years later, after his conviction became final, a remarkable event occurred. Michael Hellerman, the Govern- ment’s chief witness at Ostrer’s trial, published a book entitled Wall Street Swindler (Doubleday & Co., Inc., 1977), an autobiography recounting the author's life, first as a master criminal, and then as a master prosecution witness. Ostrer’s counsel thereupon filed a motion under 28 U.S.C. § 2255, seeking to vacate Ostrer’s conviction and sentence on the ground that certain exculpatory information, revealed in the book for the first time, was known by the Government and was suppressed at the time of trial. District Judge Brieant, to whom the case had been trans- ferred for collateral proceedings, convened an evidentiary hearing at which Hellerman was ordered produced, and after hearing Hellerman and numerous other witnesses and examin- ing documents over the course of four days of testimony and argument, Judge Brieant made and filed his “Findings and Conclusions,” set out in Appendix A. FINDINGS OF THE District Court. 1. Natco/Merchandise Plus Bankruptcy Fraud. Judge Brieant found (Appendix A, at 6a-16a) that Heller- man was desperately in need of funds to pay off some loan- sharks who were threatening to kill him. Hellerman thereby 12 designed a plan for siphoning $80,000 from Natco and Mer- chandise Plus, two companies that were on the verge of bankruptcy as a result of an ongoing scheme engineered earlier by Hellerman to milk their funds. However, Hellerman learned that his cohort in crime, Samuel Falgiano a/k/a Sammy Feet, also had intentions to steal this $80,000, and Hellerman thus found himself in direct competition with Feet. Hellerman thereupon went to the Chief of the Criminal Division, disclosed the ongoing bankruptcy fraud, and revealed that Sammy Feet was about to pick up the $80,000 at a casino in the Bahamas. The Chief responded by having the FBI freeze the money at the casino’s bank in Miami and by retrieving the funds himself. The Chief turned the funds over to a lawyer hand-picked by Hellerman. Hellerman then used the money for personal purposes, in- cluding payment to the loan sharks. Judge Brieant found that Hellerman “desperately needed” these funds and that he felt that, unless he had the money to pay off the loan sharks, his life would be in danger. (Ap- pendix A, at 7a.) The District Court made the following specific findings of fact: (1) the Government prevented Sammy Feet from steal- ing the $80,000.00 in Natco funds by freezing the pro- ceeds of the check which Schustek and Feet had caused to be deposited in the Bahamas casino, which had deposited it in turn in Florida; (2) Hellerman and Schustek did reveal the full story of the Natco swindle, including their own participation, to the Government, thereby making the Government fully aware of the intended goal of Nat- co’s bankruptcy, before it released the $80,000.00 . . .; (3) the Government was aware before it reached its deci- sion to release the funds to an attorney authorized by Schustek, that Hellerman desperately needed this money 13 to pay off loansharks who were threatening his life.” (Ap- pendix A, at 10a.) The District Court found that the Government's extraor- dinary largesse did not go unnoticed by Hellerman: “Hellerman expressed his own belief, at the eviden- tiary hearing, and in [Wall Street Swindler,| that the Government intentionally allowed him to retrieve the $80,000.00 thus conferring a substantial benefit on him.” (Appendix A, at 11a.) The intentional nature of the Government’s conduct is clear in the court’s findings: “The Court finds, as it must based on the record before it, that it should have been readily apparent to the Government, when it did release these funds, that the money inevitably would end up in Hellerman’s pocket. In effect, the Government chose to look the other way. While denying Hellerman’s direct request for the money, the Government accorded him the opportunity to gain possession of it indirectly by the charade of having the corporation’s ‘attorney’ demand and receive it for deposit in a corporate bank account. By conscious avoidance the Government thus intentionally eased the way for Heller- man to benefit from its decision to release the $80,000.00 in stolen funds to an attorney ‘representing’ Natco.” (Ap- pendix A, at lla-12a.) This “charade” was kept secret until Hellerman’s publica- tion of Wall Street Swindler. Judge Brieant found that careful 14 and calculated steps were taken by the Chief at the time of the Belmont trial to keep this information from Ostrer’s trial counsel. (Appendix A, at 15a.) The court found “intentional non-compliance” with the Brady rule by the Government on the basis of the numerous steps taken or omitted by the Government that effected a cover-up. “So many oversights may not be regarded as merely a coincidence,” concluded the District Court. (Appendix A, at 16a.) Judge Brieant concluded that this information concerning the Government's vital role in getting the $80,000 of stolen Natco funds to Hellerman constituted a violation of Brady v. Maryland. (Appendix A, at l4a.) 2. Hellerman’s Trip to Switzerland. Ostrer learned for the first time from reading Wall Street Swindler that, just prior to Hellerman’s testifying in the Bel- mont trial, he sought and obtained from another District Judge a postponement of his surrender date to begin serving his sentence and permission to travel to Switzerland.® The Swiss trip ended, and Hellerman began serving his sentence, just a couple of days before he testified at Ostrer’s trial. Judge Brieant found that Hellerman obtained court permis- sion to make the trip, with no Government opposition to his motion. The Government's non-opposition to this trip was found to be a “benefit” conferred upon Hellerman. In this connection, Judge Brieant found that “[f]ailing to oppose per- mission for Hellerman to travel was certainly a reward for his cooperation” (Appendix A, at 18a), and that, therefore, “The Government should have alerted the defense to Hellerman’s European trip, since it failed te oppose bail ‘Judge Brieant sets out the facts surrounding the Swiss trip in his opinion at Appendix A, at 16a-19a. 15 enlargement to permit the trip to go forward, a rather unusual benefit under the circumstances of this case.” (Appendix A, at 18a-19a.) Judge Brieant recognized that: “Had the defense possessed this information it would then have had the opportunity to cross-examine Heller- man with respect to the trip and to argue to the jury that when the Government failed to oppose this junket, it con- ferred a benefit. Indeed it could have been argued that Hellerman intended to secrete substantial sums of money in Switzerland.” (Appendix A, at 18a.) 3. Reduction in Hellerman’s Legal Fee. Hellerman retained a law firm that set a fee for him of $100,000,° before the attorneys learned that Hellerman was a cooperating witness. Then the following scenario took place: “In the logical belief that once the attorney was informed of his status as a cooperating witness, the fee would be substantially reduced, Hellerman asked the Chief to notify the attorney of this fact. The Chief did call the at- torney and Hellerman’s fee was subsequently reduced by $50,000.00. Hellerman thanked the Chief for his efforts.” (Appendix A, at 22a.) *Judge Brieant’s discussion and findings concerning the reduction of Hellerman’s legal fee are set out in his opinion, Appendix A, at 2la-23a. 16 Judge Brieant did “recognize that the result or consequence of the Chief's call to counsel was a reduction in fees.” (Ap- pendix A, at 22a.) The court even admitted that “The Chief may have expected that this would be the result of the call.” (Id.) However, in the court’s view, since the Government “had the right” to inform Hellerman’s counsel of his status as a cooperating witness, “(t]he fee reduction was incidential.” (Appendix A, at 22a, 23a.) Concluded the District Court: “The Government cannot be said to be conferring a benefit through the disclosure of required information simply because that information happens to be bene- ficial. We therefore find that the Government did not violate Brady by failing to inform defense counsel of the Chief’s contacts with Hellerman’s counsel.” (Appendix A, at 23a.) 4. Hellerman’s “Restitution.” At Ostrer’s trial, Hellerman told the jury that, in connection with his own conviction, he had made restitution of $12,500, and intended to make an additional $87,500 restitution, to the victims of his swindles. Judge Brieant found that after Hellerman’s testimony at Ostrer’s trial, Hellerman sought and received a refund of the escrowed $12,500, in order to fund a personal business ven- ture, and he thereafter made no further restitution. (Appen- dix A, at 34a.) Judge Brieant stated that “the whole idea of making restitution in the amount of $100,000.00 is on its face an illusory and foolish thing.” (/d.) Wrote Judge Brieant: “We must recognize this whole matter of the restitution for what it was — high sounding words calculated to 17 ameliorate Hellerman’s sentences on three indictments.” (Appendix A, at 35a.) Judge Brieant concluded that despite Hellerman’s nonpay- ment of an obligation he told the jury about, and the Govern- ment'’s failure to do anything to hold Hellerman to his obliga- tion, and notwithstanding the court’s own view that it was unlikely from the start that restitution would be made, Heller- man’s trial testimony in this regard was not perjurious, and the Government's failure to disclose was not a Brady violation. Thus, the $100,000 that Hellerman saved by not making restitution, combined with the $50,000 reduction in legal fees and the $80,000 Natco funds, totalled $230,000 in Govern- ment “largesse” to Hellerman that was undisclosed to the trial judge or to defense counsel at Ostrer’s trial. CONCLUSIONS OF THE District Court. The District Court applied a standard that it thought was required in light of this Court’s opinion in United States v. Agurs, 427 U.S. 97 (1976). The court said: “We conclude that in Ostrer’s case no reasonable per- son could say that the suppressed evidence probably would have altered the outcome of the trial. This con- clusion is based on the fact that the Ostrer jury was already abundantly aware of Hellerman’s cooperation with the Government, the substantial benefits he had ob- tained thereby, and of his participation in fraudulent and illegal schemes without number.” (Appendix A, at 42a.) (Emphasis in opinion.) ~ 18 The District Court rejected Ostrer’s contention that the sup- pressed material would not have been merely cumulative for the jury, since it attested to the Government’s willingness “to pay generously for Hellerman’s testimony.” The court based its rejection on three perceived factors. First, stated the court, “[t]here is no essential difference between pecuniary benefits which are given in exchange for testimony and benefits in the form of freedom from prosecu- tion.” (Appendix A, at 42a.) Secondly, the court said, “(t]he Government's willingness to close its eyes to Hellerman’s appropriation of the $80,000 has not been shown to have been a negotiated benefit in exchange for Hellerman’s testimony,”’ even though the gift of $80,000 in stolen funds to Hellerman was meant to keep the Gov- ernment’s witness alive and happy. (Appendix A, at 43a.) The third reason the court rejected Ostrer’s contention that the pecuniary benefits fell into a distinct class all their own is stated as follows: “There is reason to believe that Hellerman’s embezzle- ment of the $80,000.00 was tolerated only because of the Government’s awareness that unless Hellerman could repay his debts, his life, and therefore his testimony would be endangered. Thus, the $80,000.00 can be con- sidered as merely one facet of the Government’s broader ’ The District Court makes this statement notwithstanding its specific find- ing that one of the reasons it was to the Government's benefit to help Heller- man steal the $80,000 was because, as the Chief recognized, Hellerman’s life would be in danger if he could not pay the loansharks, and this kind of danger would have required the Government to pull Hellerman off the street as an informant prematurely and place him in protective custody instead. “[I]t was in the Government's interests to leave Hellerman at liberty on an undercover basis as an informant rather than placing him in a safe house. Nor did Hellerman want to go into hiding or flee.” (Appendix A, at 10a.) 19 program to guarantee Hellerman’s safety rather than as an effort to put cash in his pocket.” (Appendix A, at 43a.) This is a remarkable rationalization indeed for the Govern- ment’s participation with Hellerman in a larceny in a violation of inter alia, Federal bankruptcy laws. Besides, it directly contradicts the second stated reason for rejecting Ostrer’s con- tentions, for it shows beyond any doubt that there was a definite connection between Hellerman’s status as a witness and the $80,000 favor done for him by the Chief. Despite the startling nature of the revelations brought out at the evidentiary hearing and found by the District Court, that court stated that this suppressed material would not have struck the jury any differently than it was struck by the revela- tions at trial of earlier crimes committed by Hellerman (without Government assistance). The court insisted that there would be no difference in the mind of a juror between a concession by the Government limiting Hellerman’s guilty plea to three indictments and his exposure to “only” five years in prison (he in fact was sentenced to two years and served only three days in jail and nine months in a “safe house”), and the kinds of “concessions” revealed at the hearing. (Appendix A, at 43a-44a.) THE Court oF APPEALS’ OPINION. in Ostrer’s case, the Court of Appeals for the Second Circuit was faced with what was undoubtedly the most serious Brady violation ever to come before that court, presented by the detailed findings of a conscientious and cautious District 20 Judge. It was shocking to counsel, as it must have been to the District Court and, one assumes, to the Court of Appeals, to learn that the Chief had knowingly and willingly released $80,000 in stolen funds under circumstances such that “it should have been readily apparent to the Government, when it did release these funds, that the money inevitably would end up in Hellerman’s pocket.” (Appendix A, at lla.) “in effect,” Judge Brieant sadly concluded, “the Government chose to look the other way.” (Id.) It was, however, equally shocking when the majority opin- ion of the panel proceeded to state, as the judicially found ver- sion of the facts, not Judge Brieant’s careful and unambiguous findings, but rather the version given on the witness stand by the Chief and urged by the Government in its briefs in the District Court and on appeal — which version was not credited by Judge Brieant, who saw and heard the live witnesses before him and who examined in minute detail the damning documents placed in evidence. The concurring opinion of Judge Moore (Appendix B, at 60a-63a)*® credited Judge Brieant’s fact findings, but never- theless concluded that revelation to the jury of such a corrupt act by a high governmental official as the illicit payment of $80,000 in stolen funds to the Government’s “keystone” witness,® and the subsequent intentional suppression of that *The opinion of the Court of Appeals is found as Appendix B to this Peti- tion. *Indeed, Michael Hellerman was more than the Government's key witness. He was the Government's only incriminating witness against Ostrer. In the absence of Hellerman’s testimony, all of Ostrer’s admitted ac- tions in purchasing the securities at issue were entirely consistent with Ostrer’s being Hellerman’s dupe, rather than his co-conspirator or ac- complice. As Judge Brieant found in an earlier proceeding, “the proof against Ostrer was substantial, if the jury found the testimony of Hellerman credible, as it must have done in order to have returned these guilty verdicts.” United States v. Ostrer, 422 F. Supp. 93, 106 (S.D. N.Y. 1976) (emphasis supplied). 21 fact, would not likely have affected the verdict of a jury which, even without this shocking evidence, deliberated for 2 days before returning its verdict. The majority of the panel, however, decided the case on the basis of facts that were ccntrary to Judge Brieant’s finding — a technique which obviously rankled Judge Moore and moved him to write his concurring opinion. The majority of the panel surely understood how the evidence found by Judge Brieant would likely have affected any jury with a modicum of ethical sensibilities and common sense. Yet, rather than deal with the facts found by the District Court, the majority decided the case on the basis of facts that did not exist. The majority apparently felt that it could not affirm the District Court and uphold the conviction on the basis of the facts below, at least not without doing harm to the reputation of the Chief, who was by then in private practice and active in local bar activities. The majority’s opinion states the “facts” by summarizing the discredited testimony of the Chief, rather than Judge Brieant’s findings. (Appendix B, at 50a et seq.) The panel fails to mention that this version was heard and rejected by the District Court. Thus, for example, the majority notes that the Chief “warned Hellerman and Schusteck that they would be prosecuted if the money was later diverted by them to non- corporate purposes.” (Jd. at 50a.) Judge Brieant, on the other hand, found that the Chief never intended any such pro- secution, for the Chief knew that Hellerman would likely get the money.'’° As for the “warning,” Judge Brieant, in stark contrast to the panel’s description of it, found: '©“ By conscious avoidance the Government thus intentionally eased the way for Eellerman to benefit from its decision to release the $80,000... .” (Appendix A, at 1la-12a.) 22 “The Chief’s contemporaneous warning to Hellerman and Schustek that they would be prosecuted if they stole this money was obviously a paper tiger, since Hellerman knew full well that if the Government didn’t want him to get the money, all it had to do was keep it, or release it to a Natco receiver, its creditors or the bankruptcy court. Hellerman was right. He was never prosecuted for steal- ing the $80,000.00.” (Appendix A, at 14a.) The panel reports that the Natco funds, “according to [the Chief's] instructions,” were deposited into “a corporate ac- count.” (Appendix B, at 5la.) Judge Brieant analyzed and described this same incident as follows: “In effect, the Government chose to look the other way. While denying Hellerman’s direct request for the money, the Government accorded him the opportunity to gain possession of it indirectly by the charade of having the corporation’s ‘attorney’ demand and receive it for deposit in a corporate bank account.” (Appendix A, at lla.) The panel makes the following observation, claiming to be describing one of Judge Brieant’s findings: “Although Judge Brieant found that Ostrer had failed to establish that the $80,000 was ‘intentionally released to Hellerman so he could pay loansharks,’ he also con- cluded that the Government's decision had in effect made it possible for Hellerman to gain a benefit and that it should have advised counsel of these facts prior to trial.” (Appendix B, at 5la.) 23 This is a very different picture from what emerges from the full context of Judge Brieant’s findings. Indeed, Judge Brieant found that Hellerman expressed the belief that the Govern- ment knowingly and intentionally conferred an $80,000 benefit on him (Appendix A, at lla), while the Chief “denied strenuously that these funds were intentionally released to Hellerman so he could steal them.” (J/d.) In the face of this conflicting testimony, and the Chief's evident refusal to con- firm Ostrer’s claim that the Chief intentionally released the money to Hellerman, Judge Brieant noted that “QOstrer, who must bear the burden of proof, has been unable to confirm the contention that these funds were intentionally released to Hellerman so he could pay the loansharks.” (Appendix A, at 11a.) Judge Brieant did not, however, stop here, as the Court of Appeals majority did. He went on to say the following: “This, however, does not conclude the matter. The Court finds, as it must based on the record before it, that it should have been readily apparent to the Government, when it did release these funds, that the money inevitably would end up in Hellerman’s pocket. In effect, the Government chose to look the other way. While denying Hellerman’s direct request for the money, the Govern- ment accorded him the opportunity to gain possession of it indirectly by [a] charade. . ..” (Id.) In other words, Judge Brieant said simply that Ostrer could not prove the Chief’s intention by direct evidence — i.e., out of the Chief’s mouth. However, the circumstantial evidence 24 was overwhelming and, as a result of it, the court had to con- clude that the Chief intentionally assisted Hellerman in get- ting the money. “By conscious avoidance the Government thus intentionally eased the way for Hellerman to benefit from its decision to release the $80,000.00 in stolen funds. . ..” (Ap- pendix A, at lla-12a.) In one of its more startling statements, the majority makes the entirely unsupported claim that “The undisclosed evidence fell far short of a Govern- ment benefit in exchange for the witness’ cooperation. It remains undisputed that [the Chief] refused to turn over the $80,000 to Hellerman and that, upon deciding to turn it over to Natco, had warned him and Schustek that they would be prosecuted if they diverted the money to non- corporate purposes. At most the Government's role, in view of Schustek’s disregard of this warning, became am- biguous.” (Appendix B, at 56a.) Judge Brieant’s findings utterly contradict this view. For example, Judge Brieant found that the Chief knew that Hellerman needed the money “to pay off loansharks who were threatening his life” and that “it was in the Government's in- terests to leave Hellerman at liberty on an undercover basis as an informant rather than placing him in a safe house. Nor did Hellerman want to go into hiding or flee.” (Appendix A, at 10a.) This explains, of course, why the Chief had to get the $80,000 to Hellerman — to keep him alive, happy, nearby, and willing to take the stand. Not only does it not “remain undisputed that [the Chief] refused to turn over the $80,000 to Hellerman” (Appendix B, at 56a), but Judge Brieant found precisely to the contrary — that the Chief snatched the funds out of the reach of Heller- man’s rival, Sammy Feet, and “eased the way for Hellerman” to obtain the funds. (Appendix A, at 1la.) 25 Finally, the panel refers to “the direct incriminating evidence against Ostrer” introduced at the trial. (Appendix B, at 58a.) Yet there was not an iota of such evidence; neither the District Court, nor the Government in its briefs or oral arguments, had pointed to a single piece of evidence in- criminating'' Ostrer, other than the testimony of Hellerman.'? Judge Brieant found specifically that “[c]learly, the conviction was dependent on Hellerman’s testimony.” (Appendix A, at 4a.) Reasons for Granting the Writ. A. Tue Seconp Circuit’s TREATMENT OF THE Corrupt PRAC- TICES FounD BY THE District JUDGE, AND THE INyusTICE IN- FLICTED ON THE PETITIONER, ARE IN STARK CONFLICT WITH THE More STRINGENT STANDARDS SET AND ENFORCED BY Every OtuHer Circuit, AND Is Even in Direct ConFLicr WITH THE SECOND Circurt’s OWN TREATMENT OF Prior, LEss Ecrecious Cases, WHERE THE REPUTATION OF A HIGH PROSECUTORIAL OFFICIAL was Not So CLEARLY AT STAKE. The opinion of the Court of Appeals panel is in stark con- trast to the Brady and Agurs law developed in other circuits, and to the law as it is stringently enforced in other circuits. '' There was, of course, documentary and other evidence that Ostrer pur- chased Belmont Franchising stock and paid for it. This was not disputed by Ostrer. The only question at trial was whether Ostrer knew of the manipulation when he bought the shares, or whether he purchased the securities on a “hot tip” from Hellerman who, unbeknownst to Ostrer, was intent on “parking” some stock with Ostrer in order to reduce the number of free-floating shares and thereby make the subsequent manipulation more manageable. The fact that Hellerman left Ostrer holding worthless stock at the end of the scheme, even though Hellerman got his friends bailed out with hefty profits, is more consistent with Ostrer’s innocence than with his guilt. ‘? Judge Moore's concurring opinion suffers from the same cleer error. He refers to “all the evidence before [the jury] of Ostrer’s guilt.” (Appendix B, 26 Other circuits, for example, have been far less tolerant than the panel in the case at bar, in situations where the prosecutor stood mute and allowed a witness to give misleading testi- mony, even if that testimony might not be technical perjury. See, for example, Blankenship v. Estelle, 545 F. 2d 510 (5th Cir. 1977) '°; United States v. McCrane, 527 F. 2d 906 (3d Cir. 1975), vacated and remanded, 427 U.S. 909 (1976), on re- mand, 547 F. 2d 204 (3d Cir. 1976)'*; Dupart v. United States, 541 F. 2d 1148 (5th Cir. 1976); United States v. Sutton, 542 F. 2d 1239 (4th Cir. 1976). Yet, in the case at bar, the Second Circuit would tolerate the Government's standing mute while Hellerman insisted that the written plea agreement produced for the court and jury constituted his entire understanding with the Government, and insisted further that the favors he received were all in the nature of reduced charges and a more modest sentence. at 63a.) He fails to realize, or to mention, that all of this evidence came, un- corroborated, from the mouth of Hellerman. '9In Blankenship, the Fifth Circuit was emphatic in its holding that a pros- ecutor is under a duty to correct not only his witness’ perjury, but also an “er- roneous impression” which could mislead the jury about the existence and scope of any Government deal with the witness: “Although in the instant case the testimony that Brooks and Crawford were ‘under indictment’ may have been technically true, it left the erroneous impression of an impending trial and the absence of leniency as an inducement to testify. This court has recently made clear that we will not tolerate prosecutorial participation in technical- ly correct, yet seriously misleading, testimony which serves to conceal the existence of a deal with material witnesses.” 545 F. 2d at 513. ‘In McCrane, the United States Attorney's office had sent letters to various business and state agencies stating that a key Government witness had cooperated with the grand jury, thereby facilitating the witness’ obtain- ing business. The Third Circuit held that this evidence of favored treatment should have been disclosed, because this Court's holding in United States v. Agurs, supra, did not dilute the earlier holding in Giglio v. United States, 405 U.S. 150 (1972), to the effect that the Government could not coun- tenance false or misleading testimony coming from its witnesses. 27 Similarly, other circuits have been quick to reverse convic- tions where there was a failure to disclose that a witness had been given financial incentives. See, for example, United States v. Librach, 520 F. 2d 550 (8th Cir. 1975)'5; United States v. Garza, 574 F. 2d 298 (5th Cir. 1978) .'* Yet, in the case at bar, nearly a quarter of a million dollars in incentives — $80,000 of that being stolen funds in the Government's temporary custody — are not seen as sufficient- ly material to warrant disclosure and, in the absence of disclosure, reversal. In numerous other cases, courts of appeals have reversed convictions for Brady violations far less egregious than in the case at bar. See, for example, United States v. Butler, 567 F. 2d 885 (9th Cir. 1978); United States v. Leja, 568 F. 2d 493 (6th Cir. 1977); United States v. Sanfilippo, 564 F. 2d 176 (5th Cir. 1977). Equally serious is the fact that the doctrines and standards sought to be promulgated by the Second Circuit in the case at bar are in stark contrast to earlier decisions within the Second Circuit itself. Thus, the Ostrer holding and analysis cannot be reconciled with the recent holding in Annunziato v. Manson, 566 F. 2d 410 (2d Cir. 1977). In Annunziato, the Second Circuit re- versed a conviction on Brady grounds where it was discovered post-trial that a state’s witness, who at trial had denied that '*The Librach decision is particularly relevant, since the Eighth Circuit there dealt with a situation similar to that in the case at bar. In Librach, a Government witness had received $9,947.65 in “subsistence payments” from the Government, and this was not disclosed. This amounts to far less, of course, than the approximately $230,000 in undisclosed financial benefits ac- corded Michael Hellerman. '°In Garza, the Fifth Circuit reversed because it was undisclosed that, in a prior case, the Government had agreed to reduce from $350,000 to $20,000 the appeal bond of a person who was now a Government witness. 574 F. 2d at 301. 28 any “deal” had been made for his testimony, later testified in another case that indeed such a deal had been made. Similarly, in United States v. Badalamente, 507 F. 2d 12 (2d Cir. 1974), cert. denied, 421 U.S. 911 (1975), the Second Circuit reversed a conviction because the Government failed to disclose that a prosecution witness had written to a judge that he was under pressure from the prosecutor to testify. How can a reasoned distinction be drawn between letters evidenc- ing prosecutorial pressure on a witness, and evidence of a tran- saction whereby the Government’s chief witness is given $80,000 in stolen funds? In an earlier case, the Second Circuit evinced shock at a financial incentive being given to a witness even with court approval and when disclosed to the jury. United States v. Franzese, 392 F. 2d 954, 963 (2d Cir. 1968).'” Similarly, in earlier cases, the Second Circuit has assiduous- ly avoided revising the fact findings of a District Judge where the findings were amply supported by the evidence.'* Under the Second Circuit’s own precedents, Judge Brieant was fully justified in drawing the conclusions he did, including his con- clusion that the Chief intended to confer financial benefits upon Hellerman.'® '"In Franzese, $9,800 of the proceeds of a robbery were returned, upon court order, to a Mrs. Codero — the wife of one of the robbers, a man who became a Government witness. This peculiar maneuver “was fully before the jury” at trial. Jd. at 963. Although the Court of Appeals “confess[ed] that the Government's attitude strikes us as rather complaisant,” it saw “no basis for invoking our supervisory powers when the Government submitted the issue to the trial judge . . ..". Jd. In contrast to the disclosures made in Franzese, the curious disposition of the Natco monies in the case at bar was neither presented to the Trial Court for approval nor presented to the jurors at the Belmont trial. '8See United States v. Johnson, 327 U.S. 106 (1946). '°In an earlier opinion written, ironically, by one member of the panel in the case at bar, the Second Circuit stated that “a defendant's knowledge of a fact may be inferred from wilful blindness to the existence of the fact,” and 29 B. THe Lecat STANDARDS ANNOUNCED BY THE MAJORITY OF THE PANEL BELOW HAVE OMINOUS IMPLICATIONS FOR THE IN- TEGRITY OF THF CRIMINAL JUSTICE SYSTEM IN THE SECOND Circuit. What is perhaps most disturbing about the legal standards announced by the panel’s majority are their implications for the future operation of the criminal justice system in the Sec- ond Circuit. If followed by prosecutors, the effects will be corrosive in the extreme. The majority — disagreeing with Judge Brieant’s specific finding and holding to the contrary — found that (1) Ostrer’s trial counsel did not make a specific request for Brady material and (2) even if the Brady request filed by co-defendant’s counsel were to inure to Ostrer’s benefit, even that request was not sufficiently specific. The co-defendant did indeed make the following request: “any other material in the possession of the Government bearing adversely on the credibility, character and reputation of Michael Hellerman; and . .. any other material relating to any matter which defense counsel could properly use in cross-examination to inquire into Hellerman’s motive and bias in favor of the Government or expectation of favor from the Government.” (Appen- dix A, at 39a; Appendix B, at 55a). that defendants can be convicted who “deliberately shut their eyes to what they had ample reason to believe was the truth.” United States v. Brawer, 482 F. 2d 117, 129 (2d Cir. 1973). Thus, Judge Brieant’s findings cannot be faulted becaue he drew logical inferences from time to time in guaging the Chief's intentions. Judge Moore, in his concurring opinion, recognizes that Judge Brieant's findings are “clearly supported by the record.” (Appendix B, at 60a.) 30 Both Judge Brieant and Judge Moore considered this request sufficiently specific within the meaning of United States v. Agurs, supra. Indeed, in light of what trial counsel knew at the time of trial, one is hard pressed to suggest how the request could have been any more specific.*° Furthermore, as Judge Moore points out in his concurring opinion, there is no reason, either in policy or in conformity with Agurs, why the request of one defendant should not be considered the request of all. (Appendix B, at 62a, n. 1.) United States v. Agurs, 427 U.S. at 106-107.*! The majority goes on to strike the potentially most serious blow to the integrity of the judicial process — a blow which is bound to redound to the detriment of the Second Circuit and of litigants appearing in that circuit for many years to come. The majority holds that information concerning “the Govern- ment’s role in the Natco episode . . . was not material” and hence was not even Brady material. (Appendix B, at 58a n. 4.) Such a holding will likely result in the failure of the Government in future cases to turn over to defense counsel all manner and kind of highly exculpatory evidence, for very little evidence would ever have to be turned over if, in order to be classed as Brady material, it has to exceed in impeachment If the panel's opinion is permitted to stand, then all defense counsel, in order to protect their clients’ Brady rights, will have to file voluminous and even scandalous Brady motions in every criminal case. Indeed, one wonders how Ostrer’s counsel would have been dealt with had he filed, without foundation (for in fact the foundation was suppressed at the time), a Brady motion asking to be provided, inter alia, with evidence of all stolen funds turned over to a Government witness with the assistance of the United States Attorney's Office, and of all bankruptcy frauds in which the Government, directly or indirectly, assisted a witness to loot a bankrupt corporation's estate! This holding is nothing short of a parody of the Agurs requirement that the defendant make a “specific request” for exculpatory material. *! Indeed, in the case at bar, counsel were led to believe that “any request by either defendant inured to the benefit of the other.” (Appendix A, at 39a n. 17.) 31 potéitial and relevance the Government's role in funneling $80,000 of stolen funds to the Government's only witness by means of a “charade.” At the very least, this startling holding seriously confuses the standards for judging when evidence is exculpatory (and hence subject to being disclosed under Brady), with the standards for judging in the post-conviction context, when exculpatory evidence is of such significant materiality to the verdict that failure to turn it over to trial counsel necessitates vacating the conviction. The result called for by the majority opinion is, logically, that if and when, for example, a trial prosecutor learns that the Chief of the Criminal Division has “facilitated” a witness’ obtaining stolen funds, the prosecutor need not disclose that information prior to or at trial, if the prosecutor can predict that the jury will already be faced with a considerable amount of evidence of the witness’ prior wrongdoings. Yet reasonable people must agree — one hopes — that evidence such as the Natco caper is the very strongest sort of Brady material and ab- solutely must be turned over on pain of reversal. Indeed, only in a society utterly insensitive to corruption could such in- formation not be considered vital to, if not determinative of, a jury’s decision as to whether or not to believe critical parts of the key witness’ testimony and hence of the Government's case. If allowed to stand, the opinion of the Court of Appeals would have a further corrosive effect on the administration of justice in the Second Circuit because it would create a loop- hole in the Government’s Brady/Agurs obligation that would be as wide as the obligation itself. Thus, for example, the Court of Appeals held that “[t]he undisclosed evidence fell far short of a Government benefit in exchange for the witness’ *8 The Court of Appeals obviously adopted, with respect to all of the finan- cial favors accorded Hellerman, the District Judge's conclusion with respect 32 cooperation.” (Appendix B, at 56a.)* Under this formula- tion, a prosecutor would be allowed to confer any number of benefits upon a witness, and fail to disclose same, provided he or she went through a “charade” to make it appear that the benefits were being conferred as mere “largesse” and not in connection with or explicitly in exchange for the witness’ testi- mony! In addition, the Court of Appeals’ formulation leaves open a substantial possibility of future convictions of innocent de- fendants. Where the Government’s chief witness has already been shown to be flawed by prior criminal activities revealed to the jury, it would be merely cumulative to disclose still other wrongful acts by the witness — even substantial finan- cial rewards obtained in conjunction with a high Government official and which would demonstrate not only the witness’ character, but also his bias and motive, as well as the charac- ter, bias and motive of the Government which has vouched for the witness in front of the jury.” Thus, the more susceptible of disbelief a prosecution witness is, the weaker the Govern- ment’s obligation of disclosure becomes! What the Court of Appeals has done here is to turn the “harmless error” doctrine of Agurs on its head. What this Court obviously meant in Agurs was that a failure to disclose exculpatory evidence at trial has to be weighed in terms of its effect on the trial in order to determine, in the post-conviction setting, whether a new trial has to be granted. In making such a judgment, a court should take into account the quantity and quality of other evidence against the defendant. If it to only one such favor. Judge Brieant found that while the Chief’s telephone call to Hellerman’s lawyer had the effect of cutting his legal fee in half, and while the Chief may have known that this would be the result, the fee reduc- tion was nevertheless incidental, for there was no negotiated quid pro quo of the favor in exchange for the testimony. (Appendix A, at 22a-23a.) *? Throughout Ostrer’s trial, counsel for the Government suggested before the jury that Hellerman, for all his past misdeeds, was now reformed and was telling the truth. 33 turns out that the witness concerning whom the Government failed to disclose impeachment evidence was not quite so crucial to the conviction, then the Brady violation might be seen as harmless. This Court did not say in Agurs, or any- where else, however, that where the tainted witness’ testi- mony is the sine qua non to the conviction, the failure of the Government to fully disclose substantial impeachment ma- terial can ever be seen as harmless. The Court of Appeals opinion also exhibits an untenable — and dangerous — failure to distinguish between financial cor- ruption of a witness, and the performance by the Government of legitimate (and usually disclosed) favors for a witness, such as the bestowal of prosecutorial leniency.** The Court of Ap- peals concluded that the evidence of financial favors was “a mere drop in the bucket when viewed in the context of the wealth of other impeaching material used upon cross- examination of Hellerman.” (Appendix B, at 56a-57a.) Yet when the court goes on to list the “other impeaching material,” it is seen that none of it fits into the category of financial incentives — legal or illegal. (Id., at 57a-58a.) Aside from the issue of how the jury would likely have reacted to evidence of the Natco and other financial-incentive episodes present in this case, this Court must aiso be concerned * The Fifth Circuit in a similar situation complimented the Government for not arguing that, simply because a jury has already once convicted the de- fendant on the basis of weak or flawed evidence, this means that the Govern- ment has no obligation to disclose yet other flaws in that witness’ testimony or character, since such additional flaws are not likely to get a better recep- tion by the jury than the already-disclosed flaws. See Cannon v. State of Alabama, 558 F. 2d 1211, 1216 (5th Cir. 1977). *S This infirmity is found as well in the District Court's opinion, which said that the evidence of suppressed financial favors to the witness is not “substan- tively different” from the revelations disclosed to the jury that Hellerman had a checkered past and benefitted from the Government’s beneficent exer- cise of its prosecutorial discretion. (See Appendix A, at 42a-43a.) 34 in its supervisory capacity with the implications of this case for the future administration of criminal justice in the Second Cir- cuit, as well as the interest that the Bankruptcy Court has in this matter.2° See McNabb v. United States, 318 U.S. 332 (1943). This Court, and all federal appellate courts, have a solemn duty to take action where there is “a corruption of the truth- seeking function of the trial process.” United States v. Agurs, 427 U.S. at 104. This Court has eloquently set out its duties in this regard: “This is a federal criminal case, and this Court has super- visory jurisdiction over the proceedings of the federal courts. If it has any duty to perform in this regard, it is to see that the waters of justice are not polluted. Pollution having taken place here, the condition should be reme- died at the earliest opportunity.” Mesarosh v. United States, 352 U.S. 1, 14 (1956). It is abundantly clear in this case that the Court of Appeals has failed to redress a shocking injustice done to the Petitioner, and has equally failed to set proper standards for the future guidance of District Judges as well as prosecutors. Other agencies of Government are not likely to fill the void.?” This Court is, indeed, the forum of last resort for Petitioner and all those who might follow in his unfortunate footsteps. 98 It should be noted, after all, that the funds that the Chief released, rightfully belonged to the creditors of the bankrupt corporation that was, at that very time, under the jurisdiction of the Bankruptey Court. 27Counsel for Ostrer initiated correspondence with the Professional Responsibility Office of the Department of Justice with respect to the unethical and illegal actions of the Chief in this case. The most recent — and obviously final — response from that office, appended hereto as Appendix C, demonstrates how futile are Ostrer’s efforts to see justice done in this matter. 35 Conclusion. For the foregoing reasons, Petitioner prays that this Court issue the writ and review the judgment of the Court of Ap- peals. Respectfully submitted, ALAN DERSHOWITZ, 20 Elmwood Avenue, Cambridge, Massachusetts 02138. (617) 495-4617 Counsel for Petitioner. Of Counsel: HARVEY A. SILVERGLATE, ANN LAMBERT GREENBLATT, SILVERGLATE, SHAPIRO & GERTNER, 217 Lewis Wharf, Boston, Massachusetts 02110. (617) 723-2624 36 la Appendix A. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK LOUIS OSTRER, PETITIONER, 77 Civ. 1805-CLB -against- UNITED STATES OF AMERICA, RESONDENT. Findings and Conclusions (Following Hearing on Petition Pursuant to 28 U.S.C. § 2255) Brieant, J. On April 14, 1977,' Louis Ostrer (“Ostrer”), filed his peti- tion pursuant to 28 U.S.C. § 2255, to vacate his January 26, 1973 conviction following a jury trial before Chief Judge Edelstein for eleven counts of stock fraud including violations of 15 U.S.C. §§77q(a), 77x, 78j(b) and 78ff, Rule 10b-5 (17 C.F.R. 240.10b-5), promulgated thereunder by the Securities and Exchange Commission, federal mail fraud statute (18 U.S.C. §1341) and the conspiracy laws (18 U.S.C. §371) aris- ing out of the Belmont stock swindle. As a result of this con- ' Ostrer’s surrender had been noticed for April 15, 1977 pursuant to a man- date of the Court of Appeals issued following affirmance of a denial of a prior application for post conviction relief 2a viction, Ostrer had been sentenced to a term of three years im- prisonment and fined $55,000.00 in April of 1973.? Ostrer’s instant petition alleges several grounds for relief,’ all arising out of a single unexpected event. In late March ?Shortly after the verdict Ostrer sought a new trial on the ground of in- competence of one of the jurors. This motion was denied by Chief Judge Edelstein in United States v. Ostrer, 361 F. Supp. 954 (S.D.N.Y. 1973). Ostrer’s conviction, as well as the denial of that new trial motion, alleging that the conviction was tainted as a result of an unlawful wiretap of Ostrer’s premises by the New York District Attorney. After conducting an eviden- tiary hearing this Court denied petitioner's motion on June 4, 1976 in United States v. Ostrer, 422 F. Supp. 93 (S.D.N.Y. 1976), affirmed, 551 F.2d 303 (2d Cir.) cert. denied, 97 S. Ct. 1581 (1977). Ostrer then filed a third motion for a new trial on the ground that con- tinuous cooperation between state and federal prosecutors prior to and dur- ing his trial, must have led to the tainting of the federal prosecution, through the inevitable communication of the fruits of the illegal wiretap. Since this motion was filed after the two year statute of limitations required for new trial motions by F.R.Cr.P. 33, the Court considered the motion as a petition to set aside the conviction pursuant to 28 U.S.C. §2255. That petition was denied in a Memorandum and Order of this Court filed on April 29, 1977. Petitioner then moved for reconsideration, based on further new evidence, and a hearing was subsequently held on May 10, 1977. The Court has now reaffirmed its denial of Ostrer’s petition in a separate Memorandum and Order issued simultaneously herewith. ‘The instant petition also alleges several defects in Ostrer’s sentencing pro- ceedings. The parties have chosen, however, not to brief these allegations at this time since it is pointless to determine the validity of the sentencing if Ostrer is to be awarded a new trial. Since we cannot know whether there will be a new trial until appellate review is complete, the claims regarding the sentencing proceedings will not be treated in this decision. On resent- encing, if such is required, conceivably Ostrer could receive a shorter sentence, but on the trial record a non-custodial sentence would be inap- propriate in any event. In a separate motion filed together with the instant petition, Ostrer also moved to reopen the evidentiary hearing he!d to determine the competence of the juror, Geneva Rush. In addition to his earlier challenge of the juror’s competence, heard by Chief Judge Edelstein, Ostrer again challenged the competence of juror Rush in his motion for a new trial filed on December 11, 1974 before this Court. At the hearing on that motion it was determined 3a 1977, more than four years after his conviction, Ostrer learned that Michael C. Hellerman, one of the Government's major witnesses at his trial, had co-authored an autobiographical memoir entitled Wail Street Swindler (“WSS”), which was about to be published. After a careful reading of the manuscript, of which he obtained a pre-publication uncor- rected proof, Ostrer concluded that the Government had repeatedly violated his constitutional right to a fair and just trial by intentionally suppressing material in its possession, which would have been useful to the defense in attacking Hellerman’s credibility. In his petition Ostrer alleges that the Government failed to satisfy its obligation under Brady v. Maryland, 373 U.S. 83 (1963), to provide any and all exculpatory evidence which might prove helpful to the defense. It is undisputed that Ostrer’s trial counsel specifically requested that the Govern- ment make available any material bearing adversely on the credibility, character or reputation of Hellerman. Ostrer now contends that Hellerman’s book, and his testimony at the hear- ing, demonstrates conclusively that the Government did not reveal to the defense all of the information in its possession. Ostrer further claims that possession of this information dur- ing the trial would have enabled him to avert conviction by that Rush was an attendant and not a patient at the hospital where she was employed. Based on that determination, petitioner withdrew his motion. Since petitioner has presented no new evidence in his current set of affidavits concerning Geneva Rush, which had not already been before the Court of Appeals in 1974, the Court declines to consider petitioner's motion to vacate sentence based on the claimed incompetence of this juror. This branch of the motion is cumulative, repetitious and untimely. 4a destroying Hellerman’s credibility with the jury. Clearly, the conviction was dependent on Hellerman’s testimony.‘ Ostrer alleges several specific instances of the Government's failure to disclose information concerning Hellerman. All have been considered. Those worthy of discussion are dis- cussed under the separate headings below. As a separate ground for relief, Ostrer alleges that the Government failed to turn over to the defense material which it was required to produce under 18 U.S.C. §3500. This sec- tion, commonly called the Jencks Act, requires that the Government make available to the defense prior to cross- examination all statements of a Government witness which are within the Government’s possession, commonly called “3500 material”, or in New York courts, “Rosario material.” By custom and practice in this Circuit, this requirement has come to include all records of discussions between the prosecution and the witness, records of debriefing sessions of the witness, and any documents or prosecutors notes which incorporate the substance of any statements of the witness as, for example, in- ternal memoranda of the United States Attorneys Office and FBI 302s. Ostrer asserts that the Government failed to turn over existing 3500 material and also “purposely failed to generate” 3500 material in order to deprive the defense of useful material with which to cross-examine Hellerman. Ostrer specifically charges that Hellerman’s book makes clear that the then Chief of the Criminal Division of the United States Attorneys Office of the Southern District of New York (“the Chief”) took extensive notes of his conversations ‘In United States v. Ostrer, 422 F. Supp. 93, 106 (S.D.N.Y. 1976) this Court held: “The proof against Ostrer was substantial, if the jury found the testimony of Hellerman credible, as indeed it must have done in order to have returned these guilty verdicts.” 5a with Hellerman; yet, no such notes were turned over to the defense. Similarly, Ostrer charges that material prepared by Assistant United States Attorney (“AUSA”) John Wing was never turned over to the defense in its entirety. The third and final ground on which Ostrer bases his claim for relief is the charge that Helierman committed perjury at the Belmont trial, both with and without the prior knowledge of the Government. Ostrer argues that the extent of Hellex- man’s perjury establishes that he was an inherently incredible and unreliable witness whose testimony could not be accepted as true. An evidentiary hearing was conducted by this Court on May 10, 11 and 31, 1977 in order to make a determination as to whether or not the Government had violated its Brady obliga- tions or 18 U.S.C. §3500; and to determine whether Heller- man had committed perjury at trial with respect to the specific grounds alleged by Osi:r, thereby denying petitioner’s right to a fair trial. Post-hearing briefs have been received and con- sidered. The Court has accepted and considered the final published edition of Hellerman’s book, now on sale, as evidence in chief. The Government persists in its objections to this. A short answer is that the hearsay declarant (Hellerman) was available for cross-examination. Indeed, he declined to vouch for his book, without reservation, and falsely impugned the accuracy of his co-author, an experienced writer who organized the book from transcripts of tapes dictated by Hellerman. The book does have some obvious errors and a general aura of Munchausen about it. If further discussion is necessary we note that much of it comprises admissions against penal and financial interest; it was created while Hellerman was in the federa! witness protection program, and he was en- couraged to write it by prosecutors, marshals and other members of officialdom who facilitated this great effort before during and after. As a final bizarre twist, Hellerman, who 6a has been relocated under another identity to prevent his death at the hands of mobsters, says that where he now is he could not be seen in possession of the book. Facts A. Brady Violations Petitioner's first ground for seeking relief is, as we have noted, the Government’s alleged failure to provide the defense with all of the Brady material in its possession concerning Hellerman. 1. The Natco Swindle Ostrer’s first and most important contention is that the Government purposely withheld information concerning its role in assisting Hellerman in embezzling $80,000.00 which Hellerman, through a fraudulent scheme had drained unlawfully from Natco, Inc. and Merchandise Plus, Inc. (“Natco”).° ’Natco and Merchandise Plus were two Long Island beauty supply com- panies. The swindle, concededly engineered by Hellerman with the aid of Schustek, involved Hellerman’s acquisition of the ownership and control of both companies, using loanshark funds. His plan was to sell present and future inventory, default on the suppliers’ bills for this inventory, and siphon off or steal the cash proceeds of the sale of the inventory from the companies, in a clandestine fashion. As was intended, this scheme, or “bust out”, left the companies with no inventory, unpaid suppliers’ bills, and creditors whose only recourse lay in bankruptcy court. Hellerman had been indicted in this district in 1971 for his role in the Natco swindle conspiracy. See United States v. Falgiano et al., 71 Cr. 476 and 71 Cr. 499. On October i2, 1973 the Government filed a nolle prosequi with respect to so much of this indict- ment as concerns Hellerman. 7a As the bankruptcy of Natco became inevitable Hellerman became exceedingly anxious to obtain the last $80,000.00 still remaining in the company’s account. Hellerman wrote in WSS and in his testimony at the evidentiary hearing before me said that he desperately needed these funds in order to pay off loansharks to whom he owed large sums of money. Hellerman apparently believed that delay in repaying these loans would endanger his life. At this time he was at liberty and was an undercover “cooperating individual”. He therefore devised a scheme whereby Steven Schustek, then in nominal control of the company, would draw a check for the $80,000.00 in his own name, cash it and remit the proceeds to Hellerman, who would then pay off his debts. Such a check was eventually drawn to the order of, and signed by Steven Schustek. (Tran- script “Tr.” at 32). However, Hellerman’s plan did not work. His vo-con- spirator in the Natco fraud, Sam Falgiano a/k/a Sammy Feet, suspecting Hellerman’s plan, determined to seize the proceeds for himself, by depositing and cashing the check in a casino in the Bahamas.® Upon learning of Feet’s intention, Hellerman related the whole story of the Natco conspiracy fraud to the Chief, who then arranged for the FBI to freeze the proceeds of the check, then in a Florida bank. Having prevented Feet from stealing the money, the Government now faced the problem of determining how to dispose of the funds which had come into its possession. By this time the Government was certainly fully aware of the con- *The check which Schustek had drawn to his own order was disposited by Schustek and Sammy Feet with the Paradise Island Casino in the Bahamas. After giving the check time to clear, these two were to return to the Bahamas to obtain the proceeds of the check by a facsimile gambling scheme. When Feet returned he was informed by the casino personnel that the FBI had stepped in and seized the money. (Tr. at 42). 8a spiracy to commit fraud culminating in Hellerman’s attempt to siphon off Natco’s last $80,000.00, since the full story of the fraud had been related to the Chief by both Hellerman and Schustek. (Tr. at 262, 267). Hellerman testified at the evidentiary hearing that during his talks with the Chief he made it known that he desperately needed these funds to pay off his debts to the loansharks, who were threatening his life. The Chief did not deny, in his testimony at the hearing, that Hellerman had spoken of his pressing need for substantial sums of money (Tr. at 254), and had, in fact, requested that the $80,000.00 in Natco funds be turned over to him. (Tr. at 263-64). When Hellerman suggested to the Chief that the Govern- ment release the $80,000.00 in Natco funds to him, this sugges- tion was rejected. The Chief determined, however, that his office had no legal right to continue the hold on these funds since, according to the Chief's testimony, to do so might cause Natco to go into bankruptcy thereby giving rise to a possible cause of action by Natco’s creditor’s against the federal govern- ment. (Tr. at 268). Faced with this perceived problem the Government concluded that these funds should be returned to Natco corporate bank account. The Government, it seems, viewed such a means of returning the funds to Natco as something which would break the chain of causation, so that if Hellerman thereafter stole the money from Natco’s account a second time, or Falgiano or Schustek did so, those concerned could make the traditional Navy officer’s claim: “It didn’t happen on my watch, sir.” To achieve this end, the Chief apparently let it be known to Hellerman that the funds would be released only to an at- torney representing Natco, so that the attorney’s participation would assure that the money would go into the corporate ac- count, rather than Hellerman’s pocket. 9a On January 29, 1971, three days after Natco’s petition in bankruptcy was filed, Edward Kurland, Esq., presented a let- ter to the United States Attorneys Office (Exhibit F) in which he stated that he represented Merchandise Plus (Natco) and was authorized to make a demand for the $80,000.00 check made out to Stephen Schustek, then in the possession of the United States Attorney. This letter was accompanied by a re- tainer appointing Kurland, which was handwritten and signed by Stephen Schustek (Ex. F). Upon receipt of these im- pressive documents, the Government turned over the $80,000.00 check to Kurland, who immediately deposited it in a special account in his own name. Once the check cleared, the funds were transferred to a newly established account in the name of Merchandise Plus from which Schustek subse- quently withdrew all but $23.00 (Ex. G). Schustek then turned the money over to Morris Winters, Esq. (Hellerman’s personal attorney who shared an office suite with Edward Kurland), who then turned it over to Hellerman. Thus, the $80,000.00 less the fees of the two attorneys, did indeed find its way forthwith to Hellerman, who doled it out to pay off loansharks who were pressing him, and for other personal pur- poses. What are we to make of this bizarre story? Three questions spring immediately to mind. Did the Government knowingly allow $80,000.00 in stolen funds to be made available to Hellerman? If the Government did, in fact, aid Hellerman in this way, was it not obligated, under the Brady doctrine, to so inform the defense counsel at Ostrer’s trial? Finally, if the Government failed to inform defense counsel of the Natco in- dictment and/or the facts of the stolen $80,000.00. was this failure intentional?’ "We consider infra, the ultimate question, namely: If the Government did so violate its obligation under Brady, what effect did this have on Ostrer’s trial? 10a Not unexpectedly, petitioner would have us draw the worst possible inference, and conclude in effect that the Govern- ment was knowingly facilitating larceny by Hellerman. We must remain mindful that: “A wisdom developed after an event and having it and its consequences as a source is a stand- ard no man should be judged by.” Costello v. Costello, 209 N.Y. 252 (1913). After reviewing the testimony and the exhibits received in evidence at the evidentiary hearing, the Court finds the following facts: (1) the Government prevented Sammy Feet from stealing the $80,000.00 in Natco funds by freezing the proceeds of the check which Schustek and Feet had caused to be deposited in the Bahamas casino, which had deposited it in turn in Florida; (2) Hellerman and Schustek did reveal the full story of the Natco swindle, including their own participation, to the Government, thereby making the Government fully aware of the intended goal of Natco’s bankruptcy, before it released the $80,000.00 to Kurland; (3) the Government was aware before it reached its decision to release the funds to an attorney authorized by Schustek, that Hellerman desperately needed this money to pay off loansharks who were threatening his life. Moreover, it was in the Government’s interests to leave Hellerman at liberty on an undercover basis as an infor- mant rather than placing him in a safe house. Nor did Heller- man want to go into hiding or flee In the face of all of this, the Government released the funds to attorney Kurland, specially retained by Steven Schustek for the sole purpose of cashing this check, without investigating either Kurland or his intentions, or those of Schustek with respect to the $80,000.00. In addition, the Government made no effort to ascertain whether Natco was actually then bankrupt (which it was as of January 26, 1971, although Mer- chandise Plus did not file until] March 8, 1971) or whether the intended fraud was sufficiently advanced so that the seized lla money could be heid in the Government’s possession as evidence, or to prevent its theft by Hellerman. Hellerman expressed his own belief, at the evidentiary hear- ing, and in WSS, that the Government intentionally allowed him to retrieve the $80,000.00 thus conferring a substantial benefit on him. He also testified, however, that the Chief warned him that if he used these funds he and Schustek would be held liable and subjected to prosecution. The Chief, in his testimony, denied strenuously that these funds were inten- tionally released to Hellerman so he could steal them, citing his specific warning to Hellerman and Schustek should they resume their prior attempt to embezzle the funds. Ostrer, who must bear the burden of proof, has been unable to con- firm the contention that these funds were intentionally re- leased to Hellerman so he could pay the loansharks. This, however, does not conclude the matter. The Court finds, as it must based on the record before it, that it should have been readily apparent to the Government, when it did release these funds, that the money inevitably would end up in Hellerman’s pocket. In effect, the Government chose to look the other way. While denying Hellerman’s direct request for the money, the Government accorded him the opportunity to gain possession of it indirectly by the charade of having the corporation’s “attorney” demand and receive it for deposit in a corporate bank account.’ By conscious avoidance the Govern- ment thus intentionally eased the way for Hellerman to benefit *Indeed an attorney so receiving corporate funds in the regular course, and thereafter depositing them in a corporate account would have found it dif- ficult to prevent Schustek, an authorized signatory on the Merchandise Plus accounts, from issuing checks for noncorporate purposes. Here, however, Hellerman and Schustek could not use the regular Natco bank accounts for reasons that are obvious, and therefore opened a new one solely to clear this check and comply with the Government's requirement that it be deposited in a corporate account before being stolen. 12a from its decision to release the $80,000.00 in stolen funds to an attorney “representing” Natco. We must now consider whether the Government was obligated under Brady to reveal this $80,000.00 matter to defense counsel at the Ostrer trial. The Brady obligation re- quires that Government make the defense aware of all benefits and promises which it has conferred upon a cooperating witness, in order that the defense will have adequate informa- tion with which to attack that witness’ credibility on cross- examination. To begin with, the Government did not inform defense counsel at trial of Hellerman’s indictment in the Natco or Falgiano case. This oversight is surprising since defense counsel at trial were given copies of all of Hellerman’s other in- dictments. (Belmont Tr. at 470). In addition, most of Heller- man’s other indictments were included in the Memorandum of Agreement, entered into between Hellerman and the Govern- ment on October 19, 1972, a copy of which was made available to the defense. The failure to inform counsel of °On October 5, 1972, the Government entered into a written agreement with Michael Hellerman in which it a) offered Hellerman a plea to one two- year count in the Belmont indictment and one two-year count in the “At Your Service” indictment (United States v. Hellerman, 72 Cr. 1246) in addi- tion to the two-year count already accepted in the Imperial indictment (United States v. Aloi, et al., 71 Cr. 967); b) promised to secure Hellerman’s physical safety while in custody; c) promised to relocate Hellerman after his incarceration; d) agreed to drop further prosecutions of Hellerman in a specified number of cases; and e) promised to use its best efforts to dissuade state and local prosecutors from pressing their related prosecutions of Heller- man. In return for these promises Hellerman agreed to a) commit no further crimes; b) refrain from doing any business in securities; c) testify truthfully at trial if required; and d) provide the Government with information when re- quired. If Hellerman broke any of these promises the Government would then be free to prosecute Hellerman for any of his past criminal activities. In his letter of May 18, 1977, AUSA Richard Weinberg informed the Court that this Memorandum and other Brady at 3500 material had been turned over to defense counsel at Ostrer’s trial. At the trial, AUSA McGuire 13a Hellerman’s Natco indictment is certainly a failure to comply with Brady. However, we do note that Jay Goldberg, Esq. trial counsel for Ostrer’s co-defendant, John Dioguardi, knew of the Natco indictment by way of a pre-trial interview with Hellerman. Goldberg briefly questioned Hellerman about Natco in the presence of the jury. The extent of this question- ing makes it abundantly clear that he knew of Hellerman’s part in the Natco swindle, but not of the release of the $80,000.00 by the U.S. Attorney’s Office. Maurice Edel- baum, Esq., Ostrer’s trial counsel, knew nothing of Natco ex- cept what he heard at the trial and therefore did not question Hellerman on the subject. Defense counsel in the exercise of reasonable diligence should have known of the Natco indictment because, having been filed in 1971 in this district, it was a matter of public record. But they could not have known of the $80,000.00 benefit to Hellerman, which was not described in the indict- ment. For its part, the Government denies having conferred any benefit on Hellerman with respect to this $80,000.00, and therefore disclaims responsibility for informing defense counsel of the matter. AUSA McGuire who tried the Belmont case, did not himself know of the $80,000.00. By April 26, 1971 (See Ex. G), the Chief and several other AUSAs were aware of the ultimate disposition of the $80,000.00, to the ex- tent that they knew that Hellerman’s man Schustek had taken it. Under the principal set forth in Giglio v. United States, 405 U.S. 150, 154 (1972), that the prosecutor’s office is a single informed the Court that he had “furnished [defense] counsel with [all] the various indictments in which Hellerman has been named.” (Belmont tr. at 470). The Government does not dispute that the Natco indictment was not included in the batch of indictments which McGuire provided to defense counsel. (Tr. at 34). l4a entity for Brady purposes, we conclude that if the fact of Government participation with respect to the $80,000.00 is Brady material, then the Government was obligated to make this information known to the defense. Having found that but for the Government activity previously described, Hellerman would not have gained access to the $80,000.00, we are constrained to find that the Govern- ment thereby conferred a benefit on its cooperating witness Hellerman which should have been disclosed to the defense. The Chief’s contemporaneous warning to Hellerman and Schustek that they would be prosecuted if they stole this money was obviously a paper tiger, since Hellerman knew full well that if the Government didn’t want him to get the money, all it had to do was keep it, or release it to a Natco receiver, its creditors or the bankruptcy court. Hellerman was right. He was never prosecuted for stealing the $80,000.00. Prior to Ostrer’s trial the Government was aware that Hellerman had actually obtained the funds and had used them to pay off the loansharks, and that its treatment of the money made it possible for the witness to help himself to a benefit. This knowledge should have been communicated to defense counsel at the Belmont trial as Brady material. We cannot be sure whether this oversight was intentional or negligent. People intend the natural and ordinary conse- quences of their acts, and we may therefore infer that the Government’s failure to alert detense counsel! to this matter was intentional. The Government argues that its failure to notify the defense of the $80,000.00 was an innocent oversight resulting from the belief that no benefit had been conferred on Hellerman by Government, a belief which led inevitably to a failure of communication between prosecutors. '° '© Although the Government is one entity for the purpose of determining the Brady obligation, it may not be so for the purpose of determining intent. 15a The Court’s finding of an intentional non-compliance results from several items, including: a) the Government's failure to include the Natco indictment in the Memorandum of Agreement; b) the Government’s failure to provide the defense with a copy of the Natco indictment; c) the Government's disclosure to Judge Lasker, in a memorandum of November 2, 1972 of Hellerman’s cooperation ia the investigation of the Natco swindle; and, d) the absence of any mention of the Nat- co funds in the memorandum prepared by AUSA John Wing and made available to the defense, listing matters in which Hellerman was involved but for which he would not be pros- AUSA McGuire certainly did not intentionally suppress the information con- cerning the disposition of the $80,000.00 since he, himself, was unaware of the fact. On the other hand, he probably knew of the existence of the Natco indictment. In a memorandum to Judge Lasker, dated November 2, 1972, the Govern- ment outlined Hellerman’s participation in security fraud matters then pend- ing in the Southern District of New York, and described his cooperation with the United States Attorney’s Office in several investigations. This memoran- dum, written only two months prior to Ostrer’s trial, summarized Heller- man’s cooperation in Natco as follows. “During the fall of 1970, Hellerman also alerted this office to a bankruptcy fraud then in progress which resulted in the indictment of Samuel Falgiano and others. Your Honor will recall the facts from having presided over this trial. At the time Hellerman came to us with this information we had absolutely no knowledge of this fraud. Hel- lerman was instrumental in persuading Steven Schusteck to become a government witness and kept this office closely advised of the final stages of the fraud. Because of Hellerman’s information we were able to prevent Falgiano and others from cashing the $100,000 of corporate checks at the gambling casinos.” The Memorandum does not tel] the Court, however, of the ultimate fate of the “$100,000” which was saved from Falgiano. The most significant point about this exhibit is that it was not made available to Ostrer, nor was the in- formation contained therein imparted to his counsel. 16a ecuted. The memorandum prepared for Judge Lasker by AUSA Wing, over the signature of the Chief, was never turned over to defense counsel as either Brady or 3500 material, nor was the underlying fact of Hellerman’s participation in the Natco swindle initially, or in the $80,000.00 caper. So many oversights may not be regarded as merely a coincidence. 2. The Swiss Trip During the summer of 1972, just prior to Ostrer’s trial, Hellerman’s bail was enlarged, and he was given permission by Judge Lasker to make a trip to Europe (including Switzerland) at a time when he was awaiting sentence. The Government offered no opposition to Hellerman’s request, which was sought openly from the Court and when granted, became a matter of public record. Ostrer now alleges that while on this trip Hellerman, with the knowledge and acquiescence of the Government, deposited substantial sums of money in a secret Swiss bank ac- count. Ostrer contends that the Government’s failure to in- form the defense counsel of this trip constitutes another Brady violation. There is no doubt that Hellerman visited Switzerland in the late summer of 1972. He was tired and needed a rest! Also, he was considering whether he would relocate there when he took up a new identity following completion of all his testimony. Nevertheless, no credible proof is offered that Hellerman deposited a large sum of money, or any money in a secret Swiss bank account during this trip. Hellerman wrote in WSS, and testified at the evidentiary hearing that he did not deposit substantial sums of money in Switzerland. He recalled being stopped at the airport when departing for Europe at the instance of a personal creditor who activated the New York 17a Port Authority Police on the suspicion that he was carrying lerge sums of stolen money. The police search disclosed no li -ge sum of money. After verifying that Hellerman had per- mission to leave the country, the police allowed him to depart. The Chief, as well as AUSA McGuire, in affidavits submit- ted in these proceedings, deny having had any knowledge that Heilerman took substantial sums of cash out of the country with him, depositing it in a foreign bank account. The Chief also testified at the evidentiary hearing that he had no such knowledge. I accept this testimony as truthful. The only evidence offered by Ostrer of Hellerman’s having deposited $300,000.00 in a secret Swiss bank account is the af- fidavit of April 12, 1977 and the testimony of Martin Roth, a lawyer convicted of obstruction of justice and stock fraud."! Roth testified that Hellerman personally informed him that he had concealed a substantial sum of money in a secret Swiss ac- count. Roth testified that he repeated the story to Hellerman’s former attorney, Mr. Ernest Schlachter. Neither party called Schlachter as a witness. Roth appeared vindictive towards Hellerman. Although Roth, an attorney, has not been disbarred, his credibility is weak. Besides the likelihood that Roth is lying there is the fur- ther likelihood that Hellerman, whose whole life consisted in fraternizing with the “wise guys”, falsely told Roth that he had money in Switzerland, and did so as part of his general brag- gadocio. In any event, having observed both Hellerman and ''Martin Roth was a close associate of Hellerman, since 1968. In 1971, Hellerman offered to pay for Roth’s honeymoon, but did so with the help of a stolen credit card. Roth was convicted in December 1972 of participation in the so-called “Globus” stock fraud case, another Hellerman generated ven- ture. Convicted on his plea of guilty to a second indictment in April, 1974, he served a total of fifteen months imprisonment on both cases. Roth testified at the evidentiary hearing that he had Hellerman to thank for all his legal troubles. (Tr. at 405). 18a Roth testify on this point, and on the basis of all the evidence I decline to find that Hellerman deposited $300,000.00, or any money, in a secret Swiss bank account. I also find that the Government was unaware of any such action by Hellerman. Even if Hellerman did secrete money during his trip to Switzerland, Ostrer has been unable to prove that Hellerman stashed money in Europe with the knowledge and consent of the United States Attorney’s Office, which is the critical ques- tion. If the Government had allowed Hellerman to stash a large sum of money in Switzerland it would have conferred a substantial benefit on Hellerman, which it would then have been compelled to disclose to the defense. The Government is required to communicate as Brady material information which it knows to be true. It is not re- quired to communicate its fears or speculations. Thus, Ostrer’s reliance on the fact that the Chief had expressed the fear that Hellerman might wish to stash funds or flee during his trip to Europe (Tr. at 312) is misplaced since such specula- tion is not Brady material. The only benefit which the Government knowingly con- ferred upon Hellerman here was the decision not to oppose Hellerman’s plans for a trip to Europe while he was awaiting sentence. Actual permission to take the trip was given by Judge Lasker in response to Hellerman’s motion. Failing to oppose permission for Hellerman to travel was certainly a reward for his cooperation. Had the defense possessed this information it would then have had the oppor- tunity to cross-examine Hellerman with respect to the trip and to argue to the jury that when the Government failed to op- pose this junket, it conferred a benefit. Indeed it could have been argued that Hellerman intended to secrete substantial sums of money in Switzerland. The Government should have alerted the defense to Hellerman’s European trip, since it 19a failed to oppose bail enlargement to permit the trip to go for- ward, a rather unusual benefit under the circumstances of this case. However, the Swiss trip was a matter of public record. It took place through the authorization of an independent judicial officer, who might well have declined to authorize it without regard to the Government’s failure to oppose. I decline to find that the Government’s failure to disclose the Swiss trip to the defense was intentional. It appears to have been simply an oversight, due either to a mistaken belief that the defense was aware of the trip or to the conviction that merely failing to oppose Hellerman’s request of a judicial of- ficer for permission to travel while awaiting sentence was not a benefit which resulted in the creation of Brady material. Whichever it was, the Court does not find an intentional sup- pression of Brady information. 3. Hellerman’s Motion to Reduce Sentence Ostrer seems to allege that the Government had some kind of undisclosed agreement with Hellerman or his attorneys in effect during Ostrer’s trial, relating to Hellerman’s March 3, 1973 Rule 35 motion to reduce sentence.'? However, no evidence was offered to support this contention. No witness testified that the Government had reached any agreement with Hellerman regarding his sentence. In fact, AUSA McGuire states in his affidavit that he was unaware of any '?Hellerman testified at the evidentiary hearing that he had always planned to file the typical Rule 35 motion to reduce sentence. The motion was filed in March, 1973 and was heard and granted by Judge Lasker on Sep- tember 28, 1973. The Government took no position with respect to this mo- tion. Hellerman’s sentence was reduced to time served with the remaining time to consist of unsupervised probation. 20a Government promise or representation to Hellerman relating to the Rule 35 motion. The Chief, in his testimony, cor- roborates McGuire’s statement, which remained uncon- tradicted throughout the hearing. The Government, in fact, took no position on Hellerman’s motion to reduce. Since we are unable to find that any promise was made to Hellerman which was not revealed to the defense, there can be no viola- tion of the Government’s Brady obligation in this respect. Ostrer’s real complaint here is that AUSA McGuire made a facially absurd and unfounded statement to the trial Court but not in the presence of the jury conc-:aing Hellerman, under- lined below. “I can make a representation, and that is what is con- cerning me, the government has not made any represen- tation, express or implied that it will or even that it might make any communication of any kind whatsoever to the parole board. Indeed, it is my understanding that this witness’ [Hellerman] attorneys do not expect to reply (sic) for an early parole nor do they expect to make an applica- tion for a reduction of sentence.” (Belmont Tr. at 696.) As the record shows, McGuire’s representations were true, but his expectation was wrong. Although it is likely that McGuire should not have stated his expectations to the Court, this com- plaint by Ostrer is untimely. Every sentenced hoodlum in- tends to make an application to reduce pursuant to Rule 35 F.R. Cr. P. There is nothing to lose but the paper. Ostrer has known since March, 1973 that McGuire’s expectation was un- founded and wrong, yet he waited four years to challenge it. This contention has no place in a habeas petition said to be based on the revelations in Hellerman’s book. It is rejected for want of merit. Qla 4. Hellerman’s Place of Imprisonment In his petition, Ostrer alleges that the Government made a promise or representation to Hellerman that he would be able to serve his sentence in a “safe house” as opposed to an or- dinary prison and that this promise was not revealed to the defense in accordance with Brady. Once again, however, there is no evidence in the record to support this contention. The Memorandum of Agreement, which was made available to the defense, states that the Government “will take such precautions as are necessary to secure his [Hellerman’s] physical safety,” while he is in prison. This statement ade- quately notified the defense that the Government might seek to have Hellerman serve his time in a safe house rather than an ordinary prison. (Tr. at 373-77). Moreover, AUSA Wing testified at the evidentiary hearing that prior to January, 1973 no promises or representations were made to Hellerman as to where his sentence would be served. (Tr. at 379).'° This testimony stands uncontradicted. In fact, Hellerman’s ac- count in WSS confirms that he was not promised that he would serve his sentence in a safe house, although he made every effort to obtain such a promise. Since there was no unrevealed promise, there is no Brady violation. 5. Reduction of Hellerman’s Attorneys Fees Ostrer alleges that Hellerman received a benefit from the Government by way of the Government’s successful efforts to "On June 1, 1977 AUSA Richard Weinberg furnished the Court with copies of two letters written by AUSA John Wing to Henry Petersen of the Justice Department requesting that Hellerman be allowed to serve his time in a safe house. These letters are dated February 6, 1973 and May 25, 1973, well after the completion of Ostrer’s trial. 22a gain a reduction in his attorneys fees. Hellerman reports in WSS and his testimony, that when he first consulted his chosen attorney he was asked for a retainer of $100,000.00. In the logical belief that once the attorney was informed of his status as a cooperating witness, the fee would be substantially re- duced, Hellerman asked the Chief to notify the attorney of this fact. The Chief did call the attorney and Hellerman’s fee was subsequently reduced by $50,000.00. Hellerman thanked the Chief for his efforts. The Chief agrees generally with Hellerman’s account of these events. He testified that he did call the attorney and discussed Hellerman’s status as a cooperating witness, a fact of which the attorney was previously ignorant.'** He did not discuss the fee during this conversation. Since the amount of effort required to represent a cooperating witness is obviously less, counsel did reduce the fee. The Government maintains that it committed no im- propriety in revealing Hellerman’s status as a cooperating witness to his attorney at his request. We agree with the Government that it neither sought nor won a fee reduction for the benefit of Hellerman. The record amply supports this conclusion. The Chief in his testimony denied that he in- terceded with respect to Hellerman’s legal fees. Of course, the Court does recognize that the result or conse- quence of the Chief’s call to counsel was a reduction in fees. The Chief may have expected that this would be the result of the call. Nonetheless, the Government had the right, perhaps even the obligation, to inform Hellerman’s counsel of his true status, regardless of the potential beneficial effect of this infor- '94 Although Hellerman had a conference with his attorney, he did not disclose his status as a cooperating witness since he was acting in an under- cover capacity at that time. His conference with the attorney was not in private and he was fearful that if he disclosed his status the information would be leaked. 23a mation. Hellerman’s status as a cooperating witness had to have been communicated by the prosecutor to the witness’ counsel, or sought by counsel from the prosecutor at some time. The fee reduction was incidental to this requirement. The Government cannot be said to be conferring a benefit through the disclosure of required information simply because that information happens to be beneficial. We therefore find that the Government did not violate Brady by failing to inform defense counsel of the Chief’s contacts with Hellerman’s counsel. 6. Non-prosecution of Hellerman’s family Hellerman claims that after negotiations by his attorneys the Government agreed not to prosecute any members of his immediate family. Hellerman testified to his belief that this agreement was an important part of his deal with the Govern- ment. This covenant was not made a part of the Memoran- dum of Agreement nor was it communicated to the defense. Since Thomas Edwards, Esq., who assisted counsel in representing Hellerman was responsible for negotiating the agreement with the Government, Edwards is found to be a person with intimate knowledge of the contents of the agree- ment between Hellerman and the Government. Edwards testified that the Government informed him that whether Hellerman cooperated with the Government or not, it had no interest in prosecuting Hellerman’s relatives. (Tr. at 394-95). Edwards further testified that he was “certain . . . that this had nothing to do whatsoever with any quid pro quo. . . be- tween the Government and Hellerman.” (Jd. at 398.) The Chief, in his testimony, corroborated the fact that the nonprosecution of Hellerman’s family was not part of the Government’s agreement with Hellerman. The failure of the 24a Memorandum of Agreement to mention Hellerman’s family also confirms Edwards’ version of the story. Hellerman may have thought that his lawyers won a big concession when, in fact, the nonprosecution was a matter of prosecutorial discre- tion exercised by the Government unilaterally. Since we do not find that the Government conferred a benefit on Hellermen in return for his cooperation, the deci- sion not to prosecute Hellerman’s family was not Brady material, which must be turned over to the defense. Govern- ment actions which fortuitously benefit a witness are different from benefits in exchange for testimony which must be re- vealed to the defense to provide material for an attack on a witness’ credibility. B. Violation of 18 U.S.C. § 3500"* Ostrer claims that Hellerman’s book and testimony reveal that the Government failed to turn over §3500 material which 418 U.S.C. §3500 provides as follows. “(a) In any criminal prosecution brought by the United States, no statement or report in the possession of the United States which was made by a Government witness or prospective Government witness (other than the defendant) shall be the subject of subpoena, discovery, or inspection until said witness has testified on direct examination in the trial of the case. (b) After a witness called by the United States has testified on direct examination, the court shall, on motion of the defendant, order the United States to produce any statement (as hereinafter defined) of the witness in the possession of the United States which relates to the sub- ject matter as to which the witness has testified. If the entire contents of any such statement relate to the subject matter of the testimony of the witness, the court shall order it to be delivered directly to the defendant for his examination and use. (c) If the United States claims that any statement ordered to be pro- duced under this section contains matter which does not relate to the 25a the Government generated regarding Hellerman. Hellerman testified that the Chief and other AUSAs took extensive notes of certain of their conversations. He describes one incident in great detail. According to Hellerman the Chief had a desk drawer which contained “extensive notes” which the Chief subject matter of the testimony of the witness, the court shall order the United States to deliver such statement for the inspecticn of the court in camera. Upon such delivery the court shall excise the portions of such statement which do not relate to the subject matter of the testimony of the witness. With such material excised, the court shall then direct delivery of such statement to the defendant for his use. If, pursuant to such procedure, any portion of such statement is withheld from the defendent and the defendant objects to such withholding, and the trial is continued to an adjudication of the guilt of the defend- ant, the entire text of such statement shall be preserved by the United States and, in the eveat the defendant appeals, shall be made available to the appellate court for the purpose of determining the correctness of the ruling of the trial judge. Whenever any statement is delivered to a defendant pursuant to this section, the court in its discretion, upon ap- plication of said defendant, may recess proceedings in the trial for such time as it may deterir‘ne to be reasonably required for the examination of such statement by said defendant and his preparation for its use in the trial. (d) If the United States elects not to comply with an order of the court under subsection (b) or (c) hereof to deliver to the defendant any such statement, or such portion thereof as the court may direct, the court shall strike from the record the testimony of the witness, and the trial shall proceed unless the court in its discretion shall determine that the interests of justice require that a mistrial be declared. (3) The term “statement”, as used in subsections (b), (c), and (d) of this section in relation to any witness called by the United States, means — (1) a written stetement made by said witness and signed or other- wise adopted or approved by him; (2) a stenographic, mechanical, electrical, or other recording, or a transcription thereof, which is a substantially verbatim recital of an oral statement made by said witness and recorded contem- poraneously with the making of such oral statement; or (3) a statement, however taken or recorded, or a transcription thereof, if any, made by said witness to a grand jury. 26a had taken at a session on Natco with Hellerman in the Berkshire Hotel. When, at a later date, the Chief told Heller- man that he had no such notes, Hellerman suggested that he look in his desk drawer and in fact the notes were there. (Tr. at 74-78, WSS at 269). The Chief’s testimony before me was that he took no notes of his meetings with Hellerman, which was corroborated by a search conducted by AUSA Richard Weinberg, during and after the evidentiary hearing, which revealed no 3500 material in the Natco file which could or should have been produced at the Belmont trial. (Gov't Brief II at 30). The Chief's testimony is also corroborated by the testimony of AUSA Wing who stated that he could recall no notes made by the Chief regarding Hellerman. In a carefully formulated statement contained in his af- fidavit of April 28, 1977, the Chief stated that he could not recall taking any notes of conversations with Hellerman which, “could be construed in any way as ‘a substantially ver- batim recital of an oral statement’ made by Hellerman which relates to the subject matter of Hellerman’s testimony as contemplated by Title 18, United States Code, Section 3500.” AUSA Harold F. McGuire states in his affidavit that he pro- duced no 3500 material other than that submitted to defense counsel at trial. McGuire also states (in further corrobora- tion of the Chief’s testimony) that he knows of no other 3500 material relating to Hellerman’s testimony at Belmont which was not made available to defense counsel. Hellerman’s testimony as to the Chief’s “drawerful” of notes remains uncorroborated. There is ample evidence to the con- 27a trary on this point. We are left with no more than a specula- tion that certain notes exist. Mere speculation is insufficient to support Os'rer’s claim that the Government failed tc provide existing 3500 material. The other possibility which must be examined is that the Chief and AUSA Wing did take notes of their interviews with Hellerman but felt that these notes did not concern matters as to which Hellerman could testify on his direct examitiation in Belmont or that these notes did not consist of a “substantially verbatim recital” (18 U.S.C. §3500(e) definition of ‘statement’) of oral statements by Hellerman. This theory is supported by Wing who testified that he turned over to AUSA McGuire prior to the Belmont trial fifteen to twenty pages of his notes from Hellerman interviews. (Tr. at 369). Wing also testified, however, that these notes did not contain material relevant to Belmont. For the most part these notes concerned other investigations and other criminals. Wing prepared his two-page Brady memorandum which was given to defense counsel, by extracting any reference in these notes which related to Belmont or bore on Hellerman’s credibility. It is well established that only those notes containing actual state- ments adopted or approved by the witness need be turned over to defense counsel as 3500 material. See Goldberg v. United States, 425 U.S. 94 (1976). During the evidentiary hearing the Court instructed the Government to make available any of the Wing notes not already turned over to the defense, which might be construed as Brady or 3500 material. (Tr. at 370). This order included material relating to Ostrer, the Belmont trial or the prior criminality of Hellerman. The search of these notes was car- ried out by AUSA Weinberg, who reported that the notes con- tained no further Brady material. (See letter of AUSA Weinberg to Harvey Silverglate, May 31, 1977). We find, therefore, that Ostrer has failed to prove that the Government 28a was remiss in turning over existing and relevant 3500 material to the defense at the Belmont trial. Ostrer does not stop with the claim that existing 3500 material was suppressed. He argues, in the alternative, that the Government purposely refrained from producing 3500 material on Hellerman in order to avoid the necessity of mak- ing such material available to the defense. This contention is without merit. Ostrer is unable to cite any precedent which establishes a requirement that the Government create 3500 material. A prosecutor has the discretion to decide whether to take any notes of his conversations with witnesses and whether to include in those notes “substantially verbatim recitals” of the statements of that witness. Ostrer’s claims with respect to Brady and 3500 are essential- ly overlapping. The Brady obligation requires the Govern- ment to provide the defense with exculpatory information, in- cluding written or oral material in its possession which is useful for the impeachment of a Government witness. For ex- ample, if an AUSA interviewed Hellerman and learned that Hellerman was made a promise by another AUSA, or that Hellerman had committed a new offense, he would be re- quired to alert the defense counsel to this information, regard- less of whether or not he wrote it down in the witness’ words. Section 3500 requires the production of Government records of a witness’ actual statements. Here, the lack of substantial 3500 material does not relieve the Government of its obliga- tion to make the defense aware (via Brady) of exculpatory or “impeaching” information. The result is the same. Either material information was withheld or it was not. The Court finds no separate violation of the Government’s obligation to make existing 3500 material available to the defense. 29a C. Perjury by Hellerman Ostrer alleges several instances of Hellerman’s “perjury.” During the Belmont trial Hellerman characterized Ostrer as his partner or as a co-conspirator in the Belmont stock swindle. In his book, on the other hand, Hellerman identifies Ostrer as another “pigeon” in Belmont, i.e., one who is himself a victim of aswindle. The characterization at trial of Ostrer by Heller- man as a conspirator rather than as a victim is viewed by Ostrer as an intentional perjury which lies at the heart of the Government’s case. Another example of Hellerman’s alleged “perjury” at the Belmont trial was his claim, in connection with his own con- viction, to have made restitution of $12,500.00 and his stated intention to make restitution of the remaining $87,500.00 which he had agreed to provide. Ostrer alleges that Heller- man lied again when he testified that he did not know whether Ostrer had made or lost money on the Belmont deal, since Hellerman wrote in WSS that Ostrer in fact lost $105,000.00 in the Belmont swindle. Ostrer provides other examples of contradictions between Hellerman’s trial testimony and the revelations in WSS. But beyond the particular allegations of [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_1854%3A1. Public record. Not legal advice.