Petition — Weiskopf v. United States

—

FILED

JAN 11 1979

‘ Supreme Court, U.

IN THE

Teer, JR., CLERK

Supreme Court of the Uni

OCTOBER TERM, 1978 “

No.7... €8=-1097

%

+

ABRAHAM WEISKOPF and BERNICE WEISKOPF,

Petitioners,

V.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

CuHarLes A. STILLMAN

JULIAN W. FRIEDMAN

460 Park Avenue

New York, New York 10022

RonaLtp GENE WouHL

1350, Avenue of the Americas

New York, New York 10019

Roy M. Coun

39 East 68 Street

New York, New York 10021

Counsel for Petitioners

TABLE OF CONTENTS

PAGE

MI IE duce camate he tactedstedecsccccscces 1

Ne cadence oe 2

Questions Presented for Review ...............00. 2

Constitutional and Statutory Provisions Involved ... 3

Statement of the Case ....5.. 0c ccc cccccccccccccce 4

Reasons for Granting the Writ .................... 6

lice sere cvccdeccese 18

Bo gee ERS EES ee App. 1

TaBLE OF AUTHORITIES

Cases:

Awkard v. United States, 352 F.2d 641 (D.C. Cir.

ERR a AS 16, 17

Kastigar v. United States, 406 U.S. 441 (1972) ...... 6

Michelson v. United States, 335 U.S. 469 (1948) ..... 14, 17

Murphy v. Waterfront Comm’n, 378 U.S. 52 (1964) .. 6

Shimon v. United States, 352 F.2d 449 (D.C. Cir.

AMOR URE MERRUNURGE Rime bscerecccccceces 16

United States v. Dornau, 359 F.Supp. 684 (S.D.N.Y.

1973), rev’d on other grounds, 491 F.2d 473 (2d

Cir.), cert. denied, 419 U.S. 872 (1974) ......... 11

United States v. Hinton, 543 F.2d 1002 (2d Cir.), cert.

denied sub nom. Carter v. United States, 429

Urea ent an venecyiecscccescs 12

TABLE OF AUTHORITIES

PAGE

United States v. Kurzer, 534 F.2d 511 (2d Cir. 1976) 7

United States v. Lewis, 482 F.2d 632 (D.C. Cir. 1973) 17

United States v. McDaniel, 482 F.2d 305 (8th Cir.

BPGOD < cudeg vat vevssuenessanceadsbewnasena sts 9

United States v. Minieri, 303 F.2d 550 (2d Cir.), cert.

denied, 371 U.S. 847 (1962) ........cccccceeees 17

United States v. Nemes, 555 F.2d 51 (2d Cir. 1977) .. 6

Statutes and Rules:

Bb SEs DOMED «we 00s bad evandeekescecsonn 3,5

ED Re OE Viv cs e'evnadeascehancenedtucdceens 9,11

Federal Rules of Evidence:

PSE Scdakscnacspanaenas osbevedestaealnl 16

Pe Oe ee any 4, 14, 16

Treatises:

McCormick, Evidence (1954 Ed.) §158 ............ 17

Wigmore, Evidence (3d Ed. 1940) $1617 ........... 17

IN THE

Supreme Court of the United States

OCTOBER TERM, 1978

°

ApraHaM Welskopr and Bernice WEISKOPF,

Petitioners,

v.

Unitep States or AMERICA,

Respondent.

7%

Ww

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Petitioners pray that a writ of certiorari issue to review

the judgment of the United States Court of Appeals for

the Second Circuit affirming judgments of conviction under

18 U.S.C. §§152 and 371 and 26 U.S.C. §7201 entered

against them in the United States District Court for the

Southern District of New York. As demonstrated below,

it is respectfully submitted that certiorari is necessary

in order to correct an error which strikes at the very heart

of the immunity provision of the Bankuptcy Act.

Opinion Below

The opinion of the Court of Appeals is not reported and

is reproduced as an Appendix hereto.

Jurisdiction

The judgment of the Court of Appeals was issued and

entered on December 14, 1978. The jurisdiction of this

Court is invoked under 28 U.S.C, § 1254(1).

Questions Presented for Review

1, Whether petitioners’ rights under the Fifth Amend-

ment were violated by the impermissible indirect use of

compelled, immunized testimony given by petitioners in

proceedings under the Bankruptcy Act where: it is undis-

puted that the government’s investigation originated from

a criminal reference letter written by counsel to the Bank-

ruptcy Trustee immediately after he had conducted an im-

munized examination of one of the petitioners on the sub-

ject matters referred for prosecution; the government

sought to sustain its burden of negating taint under these

circumstances by reliance upon the testimony of counsel

to the Trustee that the immunized examination had no

effect on his decision to make a criminal reference; and

this after-the-fact testimony was contradicted by counsel’s

statement in the course of the immunized examination:

Your Honor, I don’t want to ask Your Honor to

admonish the witness because if she wants to make

speeches, they are going to be very interesting for the

appropriate authorities,

2. Whether the Trial Court committed prejudicial error

by ruling that if petitioners called witnesses to testify as

to their present reputation for honesty and integrity, those

witnesses could be cross-examined about a 35 year old

court-martia! conviction of one of the petitioners where

the Court had already ruled that the petitioner could not

be cross-examined about that very same conviction because

its prejudicial effect outweighed any possible probative

value.

Constitutiona! and Statutory Provisions Involved

The Fifth Amendment to the United States Constitu-

tion provides:

No person shall be held to answer for a capital, or

otherwise infamous crime, unless on a presentment or

indictment of a Grand Jury, except in cases arising

in the land or naval forces, or in the Militia, when

in actual service in time of War or public danger;

nor shall any person be subject for the same offense

to be twice put in jeopardy of life or limb; nor shall

be compelled in any criminal case to be a witness

against himself, nor be deprived of life, liberty, or

property, without due process of law; nor shall private

property be taken for public use, without just com-

pensation.

Title 11 U.S.C. § 25(a)(10), [Bankruptey Act, §7(a)

(10)] provides that the bankrupt shall:

[A]t the first meeting of his creditors, at the hearing

upon objections, if any, to his discharge and at such

other times as the court shall order, submit to an ex-

amination concerning the conducting of his business,

the cause of his bankruptcy, his dealings with his

creditors and other persons, the amount, kind, and

whereabouts of his property, and, in addition, all mat-

ters which may affect the administration and settle-

ment of his estate or the granting of his discharge;

but no testimony, or any evidence which is directly

or indirectly derived from such testimony, given by

him shall be offered in evidence against him in any

criminal proceeding, except such testimony as may

be given by him in the hearing upon objections to his

discharge: Provided, however, That when the bank-

rupt is required to attend for examination, except at

the first meeting and at the hearing upon objections, if

4

any, to his discharge, he shall be paid actual and neces-

sary travelling expenses for any distance in excess of

one hundred miles from his place of residence at the

date of bankruptcy; And provided further, That the

court may for cause shown, and upon such terms and

conditions as the court may impose, permit the bank-

rupt to be examined at such place as the court may

direct whether within or without the district in which

the proceedings are pending... .

Rule 609(b) of the Federal Rules of Evidence provides:

Evidence of a conviction under this rule is not ad-

missible if a period of more than ten years has elapsed

since the date of the conviction or of the release of

the witness from the confinement imposed for that con-

viction, whichever is the later date, unless the court

determines, in the interests of justice, that the pro-

bative value of the conviction supported by specific

facts and circumstances substantially outweighs its

prejudicial effect. However, evidence of a conviction

more than 10 years old as calculated herein, is not

admissible unless the proponent gives to the adverse

party sufficient advance written notice of intent to use

such evidence to provide the adverse party with a

fair opportunity to contest the use of such evidence.

Statement of the Case

Petitioners Abraham and Bernice Weiskopf were con-

victed by a jury of conspiracy to commit bankruptcy

fraud; substantive violations of the bankruptcy fraud stat-

ute; and income tax fraud. Abraham Weiskopf was sen-

tenced to one year in prison, a fine of $10,000, and a five

year period of probation specially conditioned upon resti-

tution of $282,000 to petitioners’ corporations which are

in proceedings under the Bankruptey Act. Bernice Weis-

kopf was sentenced to one year in prison (of which three

5

months is to be served and the balance is to be on proba-

tion), a fine of $10,000, and a five year period of probation

with the same special condition (A. 654-55).

The United States Court of Appeals for the Second Cir-

cuit affirmed the judgments of conviction and remanded

the case to the District Court solely with regard to the

special condition of probation (App. 2-3).

To summarize the material facts briefly, petitioners were

officers and shareholders of A.W. Fabrics, Inc. (‘‘A.W.’’)

and Maggie Fabrics, Inc. (‘‘Maggie’’), family owned

corporations engaged in the business of buying, packaging

and reselling fabric to retail stores. On May 8, 1975, As-

signments for the Benefit of Creditors were filed by A.W.

and Maggie pursuant to the law of the State of New

York. Subsequently, the Assignments were converted into

federal bankruptcy proceedings.

The assignee in the state proceedings and the trustee in

the federal bankruptcy proceedings was the New York

Creditmen’s Adjustment Bureau. Counsel for the trustee

was the firm of Hahn, Hessen, Margolis & Ryan, primarily

in the person of the senior partner of that firm, Harry

Margolis.

On October 20, 1975, Mr. Margolis called petitioner Ber-

nice Weiskopf to testify in the Bankruptcy Court as an offi-

cer of the bankrupt companies (A. 280). That examination

was conducted pursuant to the statutory grant of immunity

contained in §7(a)(10) of the Bankruptcy Act [11 U.S.C.

§ 25(a)(10)] and covered, among other things, both money

and books and records missing from petitioners’ corpora-

tions at the time of the bankruptey—the very essence of

the ensuing indictments on which petitioners were con-

victed.

* References to (A. ——) are to pages in the Joint Appendix

on appeal. References to pages in the Appendix to the instant

petition shall be as follows: App. ——.

On the day immediately after he took the compelled and

immunized testimony of Bernice Weiskopf, Mr. Margolis

wrote a letter to the United States Attorney which ex-

pressed his view that petitioners had committed bankruptcy

fraud in connection with the affairs of A.W. and Maggie

(A. 272). That letter launched the criminal investigation

which led to the indictments on which petitioners were

tried (A. 40). Prior to that time, petitioners were not the

subjects of any investigation by the U.S. Attorney or the

F.B.L.

Reasons for Granting the Writ

1, When a defendant testifies under a statutory grant

of immunity and is subsequently indicted, the government

must satisfy a heavy two-part burden in order to sustain

the indictment: it must negate any taint arising from direct

or indirect use of the immunized testimony; and it must

affirmatively show an independent, legitimate source for the

evidence giving rise to the indictment. Kastigar v. United

States, 406 U.S. 441, 460 (1972); Murphy v. Waterfront

Comm'n, 378 U.S. 52, 79 note 18 (1964).

The burden cannot be satisfied merely by showing that

the prosecutor made no use of the immunized testimony.

As the Second Circuit stated in United States v. Nemes,

555 F.2d 51, 55 (2d Cir. 1977):

The inference that the prosecutor's lack of access to

compelled testimony assures the existence of inde-

pendent sources cannot be relied upon to afford the

witness the full protection the Constitution guarantees.

The prosecutor may have never seen the witness’s

testimony and may believe in good faith that no one

associated with the federal prosecution has seen it, but

such 4& disclaimer does not preclude the possibility

that someone who has seen the compelled testimony

7

was there!t. led to evidence that was furnished to

federal investigators.

Stated another way, the government must prove that the

indictment would have occurred, and the evidence on which

that indictment was based would have been developed by

the prosecutor, even if the defendant had not given the

immunized testimony. United States v. Kurzer, 534 F.2d

511 (2d Cir. 1976).

The manner in which this prosecution came about clearly

focused the spotlight on Harry Margolis. He was the one

who initiated the government's investigation, and he was

the one who supplied the government investigators with

their leads. To the degree that Mr. Margolis’ criminal

reference might have been directly or indirectly affected

by his immunized examination of Bernice Weiskopf, this

entire prosecution would be tainted and dismissal of the

indictments required.

The government sought to satisfy its dual burden of

negating the possibility of taint and establishing an in-

dependent source by calling Mr. Margolis at the hear-

ing on petitioners’ motion to suppress any evidence ob-

tained from the immunized testimony. He described the

investigation which his firm had undertaken in the New

York State Assignment for Benefit of Creditors pro-

ceeding which antedated the filing of the bankruptcy

petitions and stated that it was this investigation, along

with Abraham Weiskopf’s testimony in the Assignment

proceeding, which led to his letter initiating this prose-

eution (A. 161-69).

Even though he had examined Bernice Weiskopf just

one day before he wrote the reference letter, and even

though that examination specifically dealt with the missing

money and books and records, Mr. Margolis confidently

asserted that his decision to initiate the prosecution was

not influenced in any way by the testimony. He further

stated that he was able to block that testimony from his

mind when he wrote the letter and only include informa-

tion he had acquired prior to conducting the examination

(A, 197). In addition, Mr. Margolis claimed that the im-

munized testimony could not have influenced his decision

because it was not informative—it just “consisted of a lot

of I don’t know answers” (A. 176).

If the immunized testimony was of as little value as

Margolis testified, and if he was so careful to segregate

it into that portion of his mind which he claims to have

insulated from the view of the F.B.1. agents and the U.S,

Attorney, it is difficult to imagine why he would have made

the following threat toward the conclusion of the tes-

timony:

Your Honor, I don’t want to ask Your Honor to

admonish the witness because if she wants to make

speeches, they are going to be very interesting for the

appropriate authorities. .. .

(A. 324). Who were the “appropriate authorities” who

were going to be informed about the ‘‘speeches’’ contained

in the immunized testimony? When asked what he meant

by this remark, Margolis could only plead an inability to

remember (A. 207). But the key is not what Margolis

meant—it is what he did. And what he did tainted this

prosecution.

Mr. Margolis was very careful to claim that the only

information he communicated to the U.S. Attorney and the

F.B.I. was information he obtained from his own pre-

bankruptcy investigation, rather than from any tainted

source (A, 173, 176). And the Court of Appeals placed

great reliance on Mr, Margolis’s professed ability to com-

partmentalize his mind in this fashion (App. 2). However,

precisely what information Mr. Margolis gave to the

government is only part of the inquiry. Equally important

is the fact that he decided to communicate any information

9

at all—that he decided to write the October 21, 1975 letter

which initiated this prosecution.*®

In United States v. McDaniel, 482 F.2d 305 (8th Cir.

1973), the Eighth Circuit considered the uses of immunized

testimony which would taint a prosecution. Although the

most obvious would be direct presentation to the grand

jury, the Court indicated that the proscribed ‘‘indirect”

uses inciuded the decision to initiate a prosecution:

Such use could conceivably include assistance in focus-

ing the investigation, deciding to initiate prosecution.

(482 F.2d at 311),

In McDaniel, the prosecutor had read defendant’s im-

munized state grand jury testimony, but argued that there

was no taint because he had previously obtained the same

information from F.B.I. reports. Thus, the argument was

virtually identical to Margolis’ claim that his decision to

make a criminal reference derived from a source which

antedated Bernice Weiskopf’s immunized bankruptcy

*The Court of Appeals deemed significant the fact that Mr.

Margolis had no diseretion regarding his criminal reference letter

~— that he was under a statutory duty to write the letter (App. 2).

It is respectfully submitted that this is an oversimplification, The

statute in question (18 U.S.C. § 3057) gave Mr, Margolis the dis-

cretion to make the determination whether there were “reason-

able grounds tor believing’ a erime had been committed. A

hindsight statement that such grounds existed prior to the im-

munized testimony cannot change the fact that Mr. Margolis

apparently felt himself under no compulsion at that time, since

he did not make the eriminal reference until after the testimony.

It is respectfully submitted that the Constitutional principle at

stake is simply too important to permit the conclusion that the

timing of the criminal reference was mere coincidence unrelated

to the immunized testimony. The important thing is not what

Mr. Margolis could have done or should have done—it is what he

actually did.

10

testimony. In rejecting this argument, the Eighth Circuit

stated:

Because the trial court apparently failed to consider

the immeasurable subjective effect of the prosecutor’s

reading of [defendant’s] state grand jury testimony,

we conclude that the court’s finding that the govern-

ment had fulfilled the burden of proof required by

Kastigar |v, United States, 406 U.S, 441 (1972)] can-

not stand.

* * *

(T]Jhe United States Attorney is subject to human

frailties. Thus, although he asserts that he did not

use [defendant’s] testimony in any form, we cannot

escape the conclusion that the testimony could not be

wholly obliterated from the prosecutor’s mind in his

preparation and trial of the case. We agree with

Judge Metzner that ‘‘[i]t is difficult for the court to

speculate as to the effect that the reading of the

minutes might have had on the conduct and thinking

processes of the [prosecutor].” United States vy.

Dornau....

(482 F.2d at 312),

It is respectfully submitted if the words “Harry

Margolis” are substituted for the words “the Prosecutor”

and “the United States Attorney” in the above quotation,

it becomes directly applicable to this case. The Second

Circuit’s attempt to distinguish McDaniel (App. 2) on the

ground that the immunized testimony in that case had

been reviewed by the prosecutor results in a failure to

confront the principle for which McDaniel stands: that

the normal operation of the human mind is such that a

person who acts with knowledge of immunized testimony

cannot negate the possibility that such testimony may have

influenced his conduct. In other words, it is irrelevant

whether the person exposed to the “forbidden fruit” is

the prosecutor or the person: who refers the matter to

the prosecutor.

—

11

Moreover, even if the status of the person with access

to the immunized testimony is deemed relevant, Margolis’s

role is closely analogous to that of the prosecutor in

McDaniel. As counsel to the bankruptcy trustee, Mr.

Margolis had a statutory duty to investigate criminal

criminal conduct (18 U.S.C. § 3057) and had various legal

obligations to the Bankruptey Court and the creditors,

In short, he was at the very least a quasi-public official.

However we view him, Mr. Margolis is not immune from

the “human frailties” on which the Court in McDaniel based

its decision. Yet, here, contrary to McDaniel, the District

Court and the Court of Appeals failed to consider the “sub-

jective effect’’ of the immunized testimony on Mr. Margolis.

Rather, the Courts below relied on Mr. Margolis’s testi-

mony that he had decided to make the criminal reference

before he examined Bernice Weiskopf on October 20, 1975

(A. 510). But in considering such testimony it is wrong to

simply accept a witness’s claimed ability to isolate and re-

construct his thought processes.

It is respectfully submitted that rather than this un-

critical acceptance, the proper approach to testimony such

as that of Mr. Margolis is that adopted in the opinion

relied upon by the Eighth Cireuit in McDaniel; United

States v. Dornau, 359 F.Supp. 684 (S.D.N.Y. 1973), rev’d

on other grounds, 491 F.2d 473 (2d Cir.), cert. denied,

419 U.S, 872 (1974). There, the Court dismissed an in-

dictment on finding that the prosecutor had read defend-

ant’s immunized bankruptcy testimony, stating (359

F.Supp. at 687):

It is difficult for the court to speculate as to the effect

that the reading of the minutes might have had on the

conduct and thinking processes of the Assistant charged

with the prosecution of the case,

It appears to me that once the subject matter was

touched upon in the privileged testimony, and the

prosecutor had read it, he could have used it in a

12

variety of ways in this criminal prosecution. The

possibility of such usg, and the impossibility of clearly

showing that the use did not occur calls for the hold-

ing in this case that the defendants were denied the

constitutional protection that their silence would have

given them.

The government failed to suggest any acceptable reason

for treating Mr. Margolis differently from the prosecutors

in the cases discussed above. Indeed, since the prosecution

originated with Mr. Margolis, and since all investigatory

work prior to the immunized testimony was done by him,

he must be treated as the functional equivalent of the

prosecutor for purposes of determining whether the indict-

ments were tainted. Any other approach would be com-

pletely unrealistic. And when viewed from this per-

spective, the decision of the Court of Appeals becomes im-

possible to reconcile with that of the Kighth Circuit in

McDaniel. The Court here accepted precisely the kind of

testimony which the Eighth Circuit held should not be ac-

cepted—testimony that Mr. Margolis was able to obliterate

the immunized testimony from his mind at the time he

made the criminal reference.*

* Nor does Mr. Margolis’s claim that the immunized testimony

was uninformative (A. 176) justify the unquestioning credence

which the Courts below gave to his assertion that it had no effect on

his conduct. The testimony could well have influenced Margolis

even if it did not tell him anything which he did not already know.

In United States v. Hinton, 543 F.2d 1002 (2d Cir.), cert. denied

sub nom, Carter v. United States, 429 U.S. 980 (1977), the govern-

ment argued that even though the grand jury had admittedly

considered defendant's immunized testimony, such consideration

could not have contributed to the indictment because the testimony

was purely exculpatory, consisting solely of defendant's denials of

guilt. The Court rejected that argument, stating that the grand

jury could well have inferred that defendant did not testify truth-

fully; and if that oceurred, the immunized testimony would have

contributed to the indictment.

(footnote continued on following page)

13

We are not in a position to say that the testimony

definitely influenced Mr. Margolis. But there is nothing

in the record from which the Courts below could conclude

that it definitely did not. The only evidence is Mr. Mar-

golis’ denial. However, as the Eighth Circuit recognized,

when a person who has had access to immunized testimony

subsequently initiates a criminal prosecution, his denial

that one thing had anything to do with the other is entitled

to no weight because “human frailties” being what they are,

“the testimony could not be wholly obliterated from [his]

mind. . . .” United States v. McDaniel, supra, 482 F.2d at

312. But the District Court and the Court of Appeals

based their decisions primarily on Mr. Margolis’ testimony

that the immunized testimony had no influence on him.

In order to resolve the conflict between the Second and

Eighth Circuits, and to provide appropriate guidelines as

to how bankruptcy trustees can fulfill their statutory ob-

ligations while at the same time preserving the Constitu-

tional rights of persons whose testimony is compelled by

statute, it is respectfully requested that this Court grant

the petition.

(footnote continued from preceding page)

The identical reasoning applies here. There is little doubt that

Margolis concluded that Bernice Weiskopf was not testifying truth-

fully and candidly on October 20, 1975. And his conclusion that

she was lying could have been the straw that broke the camel's

back. It could have been precisely what finalized his conclusion

that there was no innocent explanation for the disappearance of

the money and the books and records and precisely what finalized

his decision to make a criminal reference—something that he had

refrained from doing for several weeks prior to Mrs. Weiskopf’s

testimony. Indeed, neither Mr. Margolis nor the Courts which

have examined his conduct provided any explanation for the gap

between the time he had initially obtained incriminating evidence

and the time he fulfilled his statutory duty by referring the matter

for prosecution. The only event of any significance during this

unexplained delay was the compelled immunized testimony of

Bernice Weiskopf.

14

2. At the trial, the government indicated its intention

to offer evidence that petitioner Abraham Weiskopf had

been convicted on a theft charge at a court martial 35

years earlier while Mr. Weiskopf was serving in the

United States Army. The Court ruled that if Mr. Weiskopf

testified, the government could not elicit evidence of this

conviction to impeach his testimony (A. 566). This ruling

was entirely proper—and indeed required—pursuant to

Rule 609(b) of the Federal Rules of Evidence, since the

conviction was more than 10 years old and since its prej-

udicial value far outweighed its probative effect.

However, the Court made another ruling with regard to

this conviction which constituted error. The Court ruled

that if witnesses were called to testify as to Mr. Weiskopf’s

present reputation as a person of good character, it would

permit the government to refer to the prior conviction in

cross-examining those witnesses (A. 566). The patent

abuse in these conflicting rulings was ignored by the Court

of Appeals. While it did note that the trial court is pos-

sessed of wide discretion in this area (App. 3), it failed to

deal with the inexplicable inconsistency in the District

Court’s ruling that would have allowed character wit-

nesses to be cross-examined about a 35 year old conviction

which could not have been used to impeach Mr. Weiskopf

due to its highly prejudicial nature.

In ruling as they did, both the District Court and the

Court of Appeals relied on Michelson v. United States, 335

U.S. 469 (1948) (A. 566) (App. 3). However, if consid-

eration is given to the facts of Michelson, the error in

these rulings becomes apparent. In Michelson, the defend-

ant had been convicted of one crime 20 years prior to trial

and had been arrested on another charge 27 years prior

to trial. Defendant called five character witnesses, and

the trial court permitted the prosecution to ask four of

them on cross-examination whether they had heard of

either the prior conviction or the prior arrest. In affirm-

15

ing, this Court made it clear that events so far in the past

were inherently suspect and that reference to them was

proper only because of the particular facts of Michelson.

The Court stated (355 U.S. at 484):

The inquiry here concerned an arrest twenty-

seven years before the trial. Events a generation old

are likely to be lived down and dropped from the

present thought and talk of the community and to be

absent from the knowledge of younger or more recent

acquaintances. The court in its discretion may well

exclude inquiry about rumors of an event so remote,

unless recent misconduct revived them. But two of

these witnesses dated their acquaintances with defend-

ant as commencing thirty years before the trial. De-

fendant, on direct examination, voluntarily called at-

tention to his conviction twenty years before. While

the jury might conclude that a matter so old and in-

decisive as a 1920 arrest would shed little light on the

present reputation and hence propensities of the de-

fendant, we cannot say that, in the context of this

evidence and in the absence of objection on this

specific ground, its admission was an abuse of discre-

tion.

Here, by contrast to Michelson, the Courts below did

not limit the permissible use of the 35 year old conviction

to character witnesses who had known petitioner for that,

or a similar, length of time. On the contrary, they held

that the testimony of any character witness—regardless

of how long he or she had known petitioner and regardless

of the fact that he or she would be testifying to petition-

er’s present reputation, rather than his reputation thirty-

five years ago—would open the door to permit the prosecu-

tor to refer to the conviction. Michelson, far from sup-

porting this result, contradicts it, since the evidence in

that case showed that at least some of the character wit-

nesses were acquainted with the defendant at the time of

16

his prior arrest and conviction, that the defendant him-

self had called attention to his prior conviction, and that

no objection had been made at trial. None of these fac-

tors was ; “esent here.

The approach which the District Court should have fol-

lowed is suggested by Rule 609(b) of the Federal Rules

of Evidence relating to the impeachment of a witness by

a prior conviction. Rule 609(b) limits the use of convie-

tions for impeachment purposes to those which are less

than 10 years old unless the court finds some special cir-

cumstances supporting the probative value of an older

conviction. Here, no such special circumstances existed,

as evidenced by the District Court’s ruling that the con-

viction could not be used for impeachment purposes if

Mr. Weiskopf testified (A. 566)—a ruling which the Court

of Appeals completely ignored (App. 3). And while Rule

609(b) does not expressly apply to cross-examination of

character witnesses, there is no reason to treat the two

situations differently.

Moreover, even if Rule 609(b) is not applied to cross-

examination of character witnesses, thie permissible scope

of cross-examination of such witnesses would still be sub-

ject to Rule 403, excluding evidence the probative value of

which is outweighed by its likely prejudicial effect. Shimon

v. United States, 352 F.2d 449 (D.C. Cir. 1965); Awkard v.

United States, 352 F.2d 641 (D.C. Cir. 1965). Here, the

record is barren of any indication that the District Court

engaged in the requisite balancing test, since the Court

was of the view that Michelson v. United States, supra,

provided authority for the automatic admission of the

prior convictions. And the Court of Appeals, while find-

ing that the prior conviction was relevant, completely

ignored its prejudicial effect (App. 3).

If the Court had utilized the same scales as it did

when considering the admissibility of this ancient convic-

tion on cross-examination of Mr. Weiskopf, it could only

17

have found that the probative value of a conviction almost

35 years old was far outweighed by its likely prejudicial

effect. While a trial court has discretion in this area,

that discretion is not unlimited. The general rule is that

the only character or reputation evidence which is proper

is character or reputation at or around the time of the

crime charged, or at a reasonable time before. Wigmore,

Evidence (3d Ed. 1940) § 1617; MeCormick, Evidence (1954

Ed.) $158; United States v. Lewis, 482 F.2d 632, 641

(D.C. Cir. 1973): Awkard v. United States, 352 F.2d 641,

643-44 (D.C. Cir. 1965). And this rule should be applied

whether the evidence at issue is defense evidence of good

character or prosecution evidence of bad character. There

is no justification for treating the two differently. In

either instance, evidence relating to a period remote in

time from the crime for which a defendant is on trial

should not be permitted where it could serve to prejudice

the jury.

And i. is clear that appellants were prejudiced by this

ruling. If character witnesses had testified, appellants

would have been entitled to a jury instruction that charac-

ter evidence alone could raise a reasonable doubt requiring

a verdict of acquittal. Michelson v. United States, 335 U.S.

469 (1948) ; United States v. Minieri, 303 F.2d 550 (2d Cir.),

cert, denied, 371 U.S. 847 (1962). Indeed, defendants re-

quested such an instruction (A. 558), but withdrew that re-

quest when the Court’s ruling compelled them to forego

calling character witnesses. If the District Court had ruled

properly on the prior conviction, the character witnesses

would have testified and the instruction been given. It is

respectfully requested that this Court grant the petition so

that it may remedy the denial of due process of law which

resulted from the rulings below, and provide guidance for

District Courts which must regularly apply the Federal

Rules of Evidence to determine the permissible scope of

cross-examination of character witnesses.

18

CONCLUSION

For the foregoing reasons, petitioners respectfully

submit that the petition for a writ of certiorari should

be granted.

Respectfully submitted,

CHartes A, StrtuMay

Juin W. FriepMan

460 Park Avenue

New York, New York 10022

Ronatp Gene Woxu

1350 Avenue of the Americas

New York, New York 10019

Roy M. Coun

39 East 68 Street

New York, New York 10021

Counsel for Petitioners

Dated: New York, New York

January 12, 1979

App. l

APPENDIX

UNITED STATES COURT OF APPEALS

For THE Seconp Circuit

At a Stated Term of the United States Court of Appeals,

in and for the Second Circuit, held at the United States

Courthouse in the City of New York, on the 14th day of

December, one thousand nine hundred and seventy-eight.

Present:

How. Wituiam H. Timsers

Hon. Tuomas J. Meskiti

Cireuit Judges

IIon. Joun F. Dootina, Jr.

United States District Judge

Sitting by Designation

78-1333

-

ae

Unrrep States or AMERICA,

Appellee,

v.

AsrAHAM Welskopr and Bernice WEIsKopPr,

Defendants-Appellants.

,

>

Appeal from the United States District Court for the

Southern District of New York.

This cause came on to be heard on the transcript of

record from the United States District Court for the

Southern District of New York, and was argued by counsel.

App. 2

On consIpeRATION wHereor, it is now hereby ordered,

adjudged, and decreed that the judgment of said District

Court be and it hereby is affirmed in all respects, except

with respect to the special condition of probation, as to

which we remand to the district court as provided herein-

after.

In ruling on defendants’ motion to suppress evidence

obtained from their immunized testimony, the District

Court properly applied the standard set forth in Kastigar

vy. United States, 406 U.S. 441 (1972). The prosecution has

the ‘‘heavy’’ burden of showing ‘‘that the evidence it pro-

poses to use is derived from a legitimate source wholly

independent of the compelled testimony.’’ Kastigar supra

at 460. Based on the testimony of Margolis to the effect

that he already had decided to refer the case to the U.S.

Attorney when the immunized testimony was given, the

District Court held that the prosecution had satisfied its

burden.

Not only was Margolis acutely aware of the potential

problems relating to the immunized testimony, but he took

great pains to separate the evidence obtained through that

testimony from the evidence that he had discovered

through his own investigations. Prior to the testimony of

Bernice Weiskopf, Margolis was aware that the money was

missing and unaccounted for and that every record from

which the disposition of funds could be ascertained also

was missing. These clearly constitute “reasonable grounds

for believing that any violations of the bankruptcy laws

or other laws of the United States . . . has been com-

mitted.’’ 18 U.S.C. § 3057(a).

Defendants’ arguments that the decision in United

States v. McDaniel, 482 F.2d 305 (8 Cir. 1973), and similar

decisions, require suppression of the indictment because

Margolis was in possession of tainted evidence when he

referred the case to the prosecutor are not persuasive,

Those cases involved situations in which the prosecutor

himself read the immunized testimony and then conducted

App. 3

the investigation that led to the defendant’s conviction.

Fear that the immunized testimony may have influenced

the conduct of the investigation is not present here because

only Margolis, the person in possession of the evidence,

was the one who referred the case to the prosecutor; he

did not conduct the investigation himself. As we indi-

eated in United States v. Catalano, 491 F.2d 268 (2 Cir.

1974), there is no per se rule requiring dismissal of the

indictment where any exposure to immunized testimony

occurs. ,

The District Court’s ruling with regard to the impeach-

ment of defendant’s character witnesses through the use of

defendant's past conviction was correct. In ruling on char-

acter evidence, we have held that the District Court “has

wide discretion and will be reversed only upon a clear

showing of prejudiical abuse.” United States v. Morgan,

555 F.2d 31, 33-34 (2 Cir. 1977) In holding that Michelson

v. United States, 335 U.S. 469 (1948), permitted the intro-

duction of a past conviction to test the extent of the char-

acer witnesses’ knowledge of defendant’s reputation, the

District Court hardly can be said to have abused its dis-

cretion. The incident about which inquiry would have

been undertaken concerned the theft of goods, an incident

which plainly relates to defendant’s honesty and integrity

and to the issue at trial. Moreover, there is nothing in

Michelson which requires the exclusion of such an inquiry

in situations such as this.

With regard to defendants’ claim that the District

Court’s jury instructions resulted in a shifting of the bur-

den of proof, a reading of the entire charge demonstrates

that the court made it clear that the government bears the

burden of proof on all issues. In each instance challenged

by defendants, the District Court was merely commenting

on & common sense inference that the jury might draw,

but was not compelled to draw, from the evidence.

Similarly, the conspiracy charge sufficiently informed the

jury that defendants had to be found to have agreed on

App. 4

certain conduct designed to achieve a specific unlawful pur-

pose. The District Court’s failure to charge the language

specifically requested by defendants does not constitute re-

versible error. The charge given by the court sufficiently

informed the jury as to the illegal actions that must be

found before defendants could be found guilty.

With regard to the special condition of probation im-

posed by the District Court pursuant to 18 U.S.C. § 3651,

we remand to the District Court for a determination as

to what the “actual damages” are. Since the jury never

explicitly found that defendants owed $282,000 to the bank-

rupts, the decisions in United States v. White, 417 F.2d

89 (2 Cir. 1969), cert. denied, 397 U.S. 912 (1970); United

States v. Taylor, 305 F.2d 183 (4 Cir.), cert. denied, 871

U.S. 894 (1962); and United States v. Stoehr, 196 F.2d 276

(3 Cir.), cert. denied, 344 U.S. 826 (1952), appear to pre-

clude the award on the present state of the record. Unless

the parties on remand can stipulate to the correct amount,

the District Court shall make this determination, after

affording the parties an opportunity to be heard,

The judgment of conviction is affirmed. The case is re-

manded solely with respect to the special condition of

probation.

William H. Timbers

WituumM FH, Trvpers

United States Circuit Judge

Thomas J. Meskill

Tomas J. Meskruu

United States Cireuit Judge

John F. Dooling, Jr.

Joun F. Dootrna, Jr.

United States District Judge

Sitting by Designation