Petition — Swinehart v. United States

flee

In The ‘i MAY 5 1980

Supreme Court gf the tbied & Louk aa

: 3

October Term, 1979

No.

UNITED STATES OF AMERICA,

ans VS. ae

ROBERT ee

oe att Petitioner.

—

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE THIRD

CIRCUIT

FRANCIS X. NOLAN

DONSKY KATZ LEVIN

& DASHEVSKY

Attorneys for Petitioner

1315 Walnut Street

15th Floor, Suite 1523

Philadelphia, Pennsylvania 19107

(215) 564-5566

LUTZ APPELLATE PRINTERS, INC.

aie Law and Financial Printing

South River, N.J. New York, N.Y. Philadelphia, Pa. Washington, D.C.

(212) 840-9494 (215) 563-5587 (202) 783-7288

(201) 257-6850

~~

TABLE OF CONTENTS

Page

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Constitutional Provisions Involved ..............000ee00. 2

UE 5 VE0S ob Wk ea WaGe Mid wha bee Obs cage nee 2

mensons for Granting the Writ. 4. oécccs cnc canacccatucuuns 5

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TABLE OF CITATIONS

Cases Cited:

Berger v. New York, 388 U.S. 41, 87 S. Ct. 1873, 18 L. Ed.

roe ot), oy eee a SL chee R a waaee Rae es 7

Black v. United States, 385 U.S. 26, 87 S. Ct. 190, 17 L. Ed.

oP si, | SeeaeTTeyerreTy. reer rrr 7

Caldwell v.. United States, 205 F.2d 879 (D.C. Cir. 1953) ...9, 17

Coplon v. United States, 191 F.2d 749 (D.C. Cir. 1951), cert.

Gumiee, F672: U.S. TAP LISS inc ie van ciavesesqueeanann 7,17

Gallarelli v. United States, 441 F.2d 1402 (3d Cir. 1971) .... 396

Glasser v. United States, 315 U.S. 60, 62 S. Ct. 457,

er hi Se, CU ERS io oki ve sab baa ckeeuecs toe 6

il

Contents

Page

Hoffa v. United States, 385 U.S. 293, 87 S. Ct. 408, 17 L. Ed.

chs sok ka 6 460 b 405.0404 0% So eeavens 7,9, 17

Mastrain v. McManus, 554 F.2d 813 (8th Cir. 1977) ....... 5

O’Brien v. United States, 386 U.S. 345 ......cceeccccevess 10

People v. Probliner, 32 N.Y. 2d 356 ...... cece eee secceees 11

Probliner v. Fogg, 438 F.S. 890 (S.D.N.Y. 1977) .......... 9

Silverman v. United States, 365 U.S. 505, 81 S: Ct. 679, 5

EE CUUED cic encrccedccssocrescsscesoess 7

United States v. Brown, 484 F.2d 418 (Sth Cir. 1973) ...... 11

United States v. Levy, 577 F.2d 200 (3d Cir. 1978) ......... 5

United States v. Morrison, 602 F.2d 529 (1979) ............ 5, 6

United States v. Orman, 417 F.S. 1126 (Colo. 1976) ....... 5

United States v. Peters, 468 F.S. 364 (S.D. Fla. 1979) ...... 5

United States v. Rispo, 460 F.2d 965 (3rd Cir. 1972) ....... 19

United States v. Rosner, 485 F.2d 1213 (2d Cir. 1973) ...... 17

United States v. Russell, 411 U.S. 423 (1973) .............. 17

Via v. Cliff, 470 F.2d 271 (3d Gir. 1972) ....cccccccccccces 6

Weatherford v. Bursey, 429 U.S. 545, 97 S. Ct. 837, 51

i cs eke wean wee vevddan sees 7, 8,9

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Contents

Page

Statutes Cited:

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as EE ako Saab aa he 6 01-4 b SRSA NAR Oda ree ARS ee

Se, MEROMEED. 6UNCIRER Dp aSLNWeesseb shes ee OAS See ag 2

United States Constitution Cited:

ee FI on ee Ob pin us Sida eae ascends cus ye

re eke Wakiebaee Ae ak ares a

a ee ee a a6. 7.4

Other Authority Cited:

Government Interceptions of Attorney-Client Communi-

Nr as SAE. Dede tikwvasevecace -Seaas 10, 11

APPENDIX

Appendix A — Opinion of the United States Court of Ap-

RR gk Bi Be er eer rr rn la

Appendix B — Judgment of the United States Court of Ap-

DENN: FOC UE AH SPU no 6 cevecx bewdcdaweseubes 3a

Appendix C — Petition For Rehearing of the United States

Court of Appeals For the Third Circuit .............. Sa

Appendix D — Order of the United States Court of Ap-

peals For the Third Circuit Dated April 7, 1980 ....... l6a

iv

Contents

Page

Appendix E — Order Extending Time of the Supreme Court

of the United States Dated April 4, 1980 ............. 17a

Appendix F — Excerpts of Motion to Suppress Dated Oc-

See era nr ee rey Tee re eee 18a

Appendix G — Excerpts of Transcript of Conversations

co Re i a, ee Prey ee er eee y Pere Tee 22a

Appendix H — Affidavit of Ronald F. Kidd Dated October

SR re Ee are er ene Soe ee eee 25a

Appendix I — Excerpts of Transcript of Sentencing Dated

EE Say NOTE. Coes ans a6 cbc Reve be a toe cowapbineien 27a

In The

Supreme Court of the United States

—o—

October Term, 1979

No.

UNITED STATES OF AMERICA,

VS.

ROBERT SWINEHART,

Petitioner.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE THIRD

CIRCUIT

The petitioner prays that a writ of certiorari be issued to

review a judgment and order of the United States Court of

Appeals for the Third Circuit in this case issued on January 17,

1980.

OPINIONS BELOW

The opinions of the Court of Appeals (Appendix A, infra at

la-12a; Appendix C, infra at 15a) are not yet reported.

2

JURISDICTION

The judgment of the Court of Appeals (Appendix B, injra,

13a-14a) was entered on January 17, 1980 and a petition for

rehearing was denied on March 7, 1980 (Appendix C, infra,

15a). On April 7, 1980 an order was entered by the United States

Court of Appeals for the Third Circuit staying issuance of the

mandate until May 6, 1980 (Appendix D, infra, 16a) and on

April 4, 1980, Mr. Justice Brennan extended the time within

which to file a petition for a writ of certiorari to and including

May 6, 1980 (Appendix E, infra, 17a). The jurisdiction of this

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

QUESTION PRESENTED

Whether the Government’s conduct in inducing Mr.

Swinehart’s attorney surreptitiously to record both private and

telephonic conferences between them and to use them to double

the sentence otherwise agreed upon was such a_ pervasive

intrusion on petitioner’s constitutional right privately to consult

with his lawyer so as to destroy tie adversary system and to

perpetrate a fraud on the court.

CONSTITUTIONAL PROVISIONS INVOLVED

Whether the conduct of petitioner’s attorney in recording

his client’s incriminating statements at the Government's request

and communicating them to the Government, violated

petitioner's Sixth Amendment right to counsel, his Fifth

Amendment right of due process and/or his Fourth Amendment

right of privacy.

STATEMENT

In an indictment filed on June 29, 1978, the Grand Jury for

the Eastern District of Pennsylvania returned an indictment,

under Criminal No. 78-217 charging your petitioner and others

with several counts of embezzlement from employee benefit

plans (18 U.S.C. §1664) bankruptcy fraud (18 U.S.C. §152) and

related offenses. During hearings conducted on pre-trial motions

to dismiss and suppress arising out of alleged improper use by

the Government of immunized testimony given by defendant

and others, the Government was attempting to prove that

certain evidence was free of taint. During this phase of the

proof, on October 4, 1978, the Government for the first time

advised and supplied defense counsel with copies of

surreptitiously recorded telephone and personal conversations

recorded through the use of a body recorder between your

petitioner Swinehart and his then attorney Arthur Kafrissen.

Petitioner was then a target of the Government’s investigation.

There were three conversations (Appendix F, infra, 18a): two

phone and one body. During cross-examination, Kafrissen

admitted that the recordings were of his former client (Appendix

F, infra, 19a). The FBI suggested tc attorney Kafrissen the areas

to be covered during the questioning (Appendix F, infra, 20a). |

During the conversation wherein the attorney wore the

body recorder (the transcript of which bears the date October

27, 1976), your petitioner and attorney Kafrissen were discussing

a proposed business venture; your petitioner was requesting

advice on its legality. That transcript clearly indicates that the

client specifically mentioned the proposed business venture and

specifically said he would not undertake it unless in the lawyer’s

opinion it was legal. The conversations are summarized at

Appendix G, infra, 22a, 23a and 24a. During that conversation,

the attorney carried out the request of the FBI and obtained

incriminating information from his client. Ultimately, the

indictments were handed down.

During the pre-trial hearings when this information first

surfaced, the Government advised defense trial counsel that it

would not use the transcripts. See affidavit of trial defense

counsel in the Appendix H, infra, 25a and 26a.

After the pre-trial motions were denied, ultimately

defendant entered into a plea agreement with the Government.

4

The terms are summarized in the opinion below. The bargained-

for sentence was 18 months. Defendant contended that as part

of the original plea bargain, he had negotiated out a condition

that he “sake and pass” the polygraph, and that he merely take

it. This, the Court of Appeals for the Third Circuit held,

constituted the single question presented on the appeal. It

remanded the case for further proceedings on this issue; one

judge dissented and held that the issue of attorney-client

privilege should also be considered.

The majority held in a footnote that this issue “is not

implicated in this appeal” and saw no reason for requiring, as

the minority opinion suggested, any further consideration of it.

The majority suggested as reasons for that conclusion that

there was no proof that the District Court relied on the tapes.

After the guilty pleas were accepted, the colloquy from the

sentencing notes of testimony indicate that a witness read

directly into the record the tapes themselves or paraphrased their

contents in the following pages: 217, 218, 220, 222, 223, 224, 226,

228, 229, 230, 231, 232, 254, 259, 266, 267, 271, 286, 289, 290

(Appendix I, infra, 27a-4la). This adequately demonstrates that

the trial court took them into consideration.

The second reason that the court gave was that Swinehart

never objected to the introduction of the tapes on attorney-client

grounds at the suppression hearing. At the sentencing colloquy

(Appendix I, infra, 27a), Mr. Kidd, defendant’s defense attorney,

specifically objected to the introduction of the evidence on the

basis of the attorney-client privilege and was overruled.

Thirdly, the Court of Appeals opined that the issue had not

been previously raised in the court below.

That issue could not have been raised in the court below for

the reason that defendants had tendered a guilty plea which was

the subject of the plea bargain agreement. Had the plea bargain

5

been specifically enforced, the defendant would have waived the

right to argue that issue. It was only after the guilty pleas had

been accepted and the defendants engaged in extensive

cooperation with the Government that the Government revealed

that it had in fact used the tapes (contrary to its assertion to

defense counsel) when it compared the answers given on the

polygraph results with the taped answers given by defendant to

his attorney. As soon as this became evident, trial counsel filed a

motion to withdraw or to specifically enforce the plea

agreement. It was after counsel discovered that the Government

“used” the surreptitiously recorded documents to double the

agreed upon sentence that the objection was lodged on the basis

of the attorney-client privilege.

In a petition for reargument before the court en banc, the

above matters were brought to the court’s attention, and it was

suggested that the reasoning in the footnote to the opinion may

have overlooked those parts of the record, and therefore were

improvidently made. Nevertheless, reargument was denied.

REASONS FOR GRANTING THE WRIT

The Court of Appeals for the Third Circuit has recently

held in United States v. Morrison, 602 F.2d 529 (1979) that the

proper remedy for improper intrusion into the relationship

between a defendant and his counsel is to dismiss the indictment

with prejudice. A petition for certiorari has been filed by the

Government in that case and is pending.

Similarly, in United States v. Levy, 577 F.2d 200 (3d Cir.

1978) it was found that mere disclosure of attorney-client

confidences required the dismissal of the indictment without

regard to whether there was any prejudicial effect on the

outcome of the trial. See also, United States v. Peters, 468 F.S.

364 (S.D. Fla. 1979: Mastrain v. McManus, 554 F.2d 813 (8th

Cir. 1977); United States v. Orman, 417 F.S. 1126 (Colo. 1976).

6

Not only did the FBI importune defendant's attorney to

wear a body recorder and record both private and telephonic

conversations, the Government subsequently advised trial

defense counsel that they would not be used. Thereafter, the

Government in fact used them to compare answers given in a

subsequent polygraph examination, the effect of which was

ultimately to double defendant’s sentence to a period of three

years’ incarceration as opposed to that called for in the plea

agreement of 18 months.

That this is specific prejudice cannot be denied. Under the

test in Morrison, supra, specific prejudice is not necessary but in

the case at bar it is present. In Morrison, the court said at page

533:

“Because an attempt to assess the prejudice to the

defendant would have been speculative at best,

we held that the intrusion and mere disclosure,

without more was sufficient to make out a Sixth

Amendment violation. In light of the fact that no

other relief would remedy the violation, and

considering the extent and seriousness of the

improper conduct of the Government, we found

the only appropriate relief for the violation to be

dismissal of the indictment.”

In citing Via v. Cliff, 470 F. 2d 271 (3d Cir. 1972) and

Gallarelli v. United States, 441 F. 2d 1402 (3d Cir. 1971), the

court noted that the Morrison’s Sixth Amendment violation fit

the pattern of the Sixth Amendment violations from those two

cases and, quoting from Glasser v. United States, 315 U.S. 60,

76, 62 S. Ct. 457, 467, 86 L. Ed. 680 (1942), noted that the

Government had failed to appreciate that the fundamental

concept of the Sixth Amendment was absolute.

The policy of law underlying a criminal defendant's

attorney-client privilege is founded upon the fundamental rights

mandated under the Fourth, Fifth and Sixth Amendments to the

7

United States Constitution. The Sixth Amendment guarantees

every defendant the right to enjoy the effective assistance of

counsel.

“It is well established that an accused does not

enjoy the effective aid of counsel if he is denied

the right of private counsultation with him.”

(Emphasis added.) Coplon v. United States, 191

F. 2d 749 (D.C. Cir. 1951), cert. denied, 342 U.S.

926 (1952).

The Fourth Amendment commands officers of the government

to comply with basic procedural requirements before the

innermost secrets of one’s home or office are invaded. Berger v.

New York, 388 U.S. 41, 87 S. Ct. 1873, 18 L. Ed. 2d 1040 (1967).

These corollary rights are insured under the Fifth Amendment’s

due process clause.

“A defendant in a criminal case may not legally

be found guilty except in a trial in which his

constitutional rights are scrupulously observed.

No conviction can stand, no matter how

overwhelming the evidence of guilt, if the accused

is denied the effective assistance of counsel, or

any other element of due process of law without

which he cannot be deprived of life or liberty.”

Coplon v. United States, supra at 751.

Consequently, a conviction obtained through an intrusion by the

government upon the confidential relationship of a defendant

and his counsel is constitutionally defective and cannot stand.

Weatherford v. Bursey, 429 U.S. 545, 558, 97 S. Ct. 837, 51 L.

Ed. 2d 30 (1977); Black v. United States, 385 U.S. 26, 87 S. Ct.

190, 17 L. Ed. 2d 26 (1966); Hoffa v. United States, 385 U.S.

293, 87 S. Ct. 408, 17 L. Ed. 2d 374 (1966); Silverman v. United

States, 365 U.S. 505, 81 S. Ct. 679, 5 L. Ed. 2d 414 (1961).

The applicable standard for determining whether a

constitutional violation of a defendant's right to the effective

assistance of counsel has occurred was outlined by the Supreme

Court in Weatherford v. Bursey. Weatherford was an

undercover agent masquerading as a cohort of defendant Bursey

during an investigation of certain political activities. Both were

arrested for vandalizing a selective service office. In order to

maintain his undercover status, Weatherford met with defendant

Bursey and his attorney to discuss the upcoming trial. The agent

communicated nothing at all to his superiors or to the

prosecution about the accused’s triai plans.

The Supreme Court found that an agent’s mere meeting

with the accused and his attorney was not per se a violation of

defendant's attorney-client relationship. “As long as_ the

information remained uncommunicated, he posed no substantial

threat to Bursey’s Sixth Amendment rights.” Weatherford v.

Bursey, supra at 556.

The test construed by the Court requires a communication

of an attorney-client conversation which creates at least a

“realistic possiblity” of injury to a defendant or benefit to the

government to constitute an unconstitutional invasion.

“...unless Weatherford communicated the

substance of the Bursey-Wise (attorney)

conversations and thereby created at least a

realistic possibility of injury to Bursey or benefit

to the government, there can be no Sixth

Amendment violation.” (Emphasis added.)

Weatherford v. Bursey, supra at 558.

Noting that the use of informants placed a “special

responsibility” on the FBI, the Justice Department has issued

the following guidelines:

“In considering the use of informants in an

authorized investigation the FBI should weigh

the following factors —

9

1. the risk that use of an informant in a

particular investigation or the conduct of a

particular informant may, contrary to

instructions, violate individual rights, intrude

upon privileged communications, unlawfully

inhibit the free association of individuals or the

expression of ideas, or compromise in any way

the investigation or subsequent

prosecution... .” (Emphasis added.) 20 Crim.

L. Wk. 2337 (Jan. 19, 1977).

Such conduct shocks the public conscience and does not

comport with the procedural standards commanded by the due

process clause. As a consequence, both the institution of the

Prosecution and the indictments derivatively produced against

appellant are defective and cannot result in a constitutionally

valid conviction.

“. .. High motives and zeal for law enforcement

cannot justify spying upon and intrusion into the

relationship between a person accused of a crime

and his counsel. The Constitution's prohibitions

against unreasonable searches, and its guarantees

of due process of law and effective representation

by counsel, lose most of their substance if the

government can with impunity place a secret

agent in a lawyer's office, to inspect the

confidential papers of the defendant and his

advisers to listen to their conversations, and to

Participate in their counsel of defense... if it

does occur a conviction tainted by it cannot

stand.” (Emphasis added.) Caldwell v. United

_ States, 205 F. 2d 879, 881 (D.C. Cir. 1953). Cited

as authority in Weatherford v. Bursey, supra at

553 and Hoffa v. United States, supra at 306.

In Probliner v. Fogg, 438 F.S. 890 (S.D.N.Y. 1977) it was

held that once defendant shows prejudice under Weatherford,

10

the government must establish beyond a reasonable doubt that

mere suppression cures any taint. Not only was there no

suppression, but the learned trial court adopted the

Government's use of Mr. Swinehart’s statements and doubled

the otherwise agreed to sentence. This was the obvious prejudice.

What is the appropriate sanction when such a violation has

occurred?

Where the overhearing is inadvertent and non-prejudicial,

as might occur when the monitoring agents did not realize the

identities or relationship of the speakers, and they terminated

the interception immediately upon becoming aware of the

potentially privileged nature of the conversation, suppression is

probably an adequate remedy. No greater sanction would avoid

future interceptions in similar circumstances. But the

government should be required to show by a high standard of

proof that its inadvertence and ignorance of identities existed

despite all reasonable safeguards, and that in fact, no prejudice

occurred. Government Interceptions of Attorney-Client

Communications, 49 N.Y.U. L.R. 87 at 103-6.

If any one of these elements is not shown by the

government, more severe sanctions appear necessary to protect

the fundamental interest of confidentiality by encouraging

maximum precautions against improper interception of

privileged communications. Intentional overhearing, though

nonprejudicial, should require at /east a new trial. See O’Brien

v. United States, 386 U.S. 345. As with the exclusionary rule in a

conventional search case, the sanction is intended to deter the

initial governmental illegality. But the interest affected requires

even greater protection in view of the secrecy of an electronic

search, its pervasive character, and the danger it poses to open

discourse — especially between lawyer and client.

Deterrence of intentional interception of privileged

communications cannot be accomplished by merely applying

the exclusionary rule, which is occasionally attempted, United

States v. Brown, 484 F. 2d 418 (Sth Cir. 1973). The threat of its

imposition can hardly be an effective deterrent. Therefore, if

suppression is the only sanction, the monitoring officer has

nothing to lose by interception of privileged conversations, and

he will be encouraged to listen, rather .han be deterred.

To order a new trial results, in practical effect, in

suppression. The new trial sanction disregards the potential for

enduring prejudice to the defendant from the government's

penetration of his confidential communications, especially those

with his attorney. People v. Probliner, 32 N.Y. 2d 356.

In Government Interceptions of Attorney-Client

Communications, 49 N.Y.U. L.R. 87 at 90, the following

appears (citation omitted):

“The most difficult case is presented when the

intercepted communication deals with strategic

aspects of the defense. These discussions might

concern any number of topics, such as the

psychological strengths and weaknesses of the

defendant, of prospective witnesses and even of

the attorneys; the effects of certain evidence on

other trials; ploys to entrap the prosecution; and

possible grounds for appeal. In an adversary

system, where style, psychology and strategy play

an important role, the prosecution’s knowledge

of and resulting ability to neutralize the defense

strategy can be as harmful to the accused as

knowledge of incriminating facts. Here, too, the

intrusion may affect only the trial at hand if

relatively unimportant insights can be gained

from the interception, for instance, if the

prosecution discovers only a discarded strategy.

However, the government may also discover the

defendant’s primary strategy, thereby forever

12

depriving him of its full effectiveness.

Unfortunately, most courts seemed oblivious to

this unpleasant reality.

Elements of a Proper Judicial Approach

At this point, the elements of a proper judicial

approach to a government interception of

attorney-client communications can be discerned.

First, since important and sometimes damaging

information must be exchanged in a defense

conference, assistance of counsel can be effective

only so long as communication between an

accused person and his attorney are secure from

government interception. If defendants realize

that government may listen to their conversations

with lawyers and may use information secured

against them, they will be unwilling to

communicate fully. If the public realizes that

government may violate the Constitution without

meaningful loss, its respect for both government

and law may be diminished. And if the

government may deprive defendants of their trial

strategy, the adversary system will become a cruel

ritual for relieving defendants of their liberty.

It should also be clear that any effective judicial

attempt to remedy a governmental intrusion must

seek to rectify fully both the societal and personal

effects resulting from the intrusion. The key

factors to determine the nature of those effects

are respectively, the nature of the intrusion and

the content of the communication intercepted

and conveyed to the prosecution. If the intrusion

is intentional, the social effects must be addressed

and remedied. If the communication has revealed

important information, a remedy must be

fashioned so as tc neutralize the effect on the’

13

defendant of allowing government access to it.

Realistic application of these basic postulates

should adequately define and protect an accused

person’s right to the assistance of counsel.

Noncustodial Situations: The Initial Formulation

The lack of a general, developed analysis to deal

with custodial interceptions of attorney-client

communications meant that the first case to deal

with a noncustodial situation had a significant

impact on later adjudication. Coplon v. United

States provided the first opportunity for judicial

consideration of the effect of government

interception of attorney-client communications

on the sixth amendment right to effect assistance

of counsel in a non-custodial context. The two

rules developed in Coplon, while perhaps

appropriate to the facts of the case, were less

appropriate in the subsequent cases to which they

were applied.

The No-Prejudice Rule

In Coplon, the defendant, convicted of

espionage, moved for a new trial, alleging that

agents of the Federal Bureau of Investigation had

monitored telephone conversations between her

and counsel both prior to and during trial. The

District of Columbia Circuit Court of Appeals

held that effective assistance of counsel

necessarily required private consultations. The

court found that any government interception of

attorney-client communications violated the

defendant’s right to assistance of counsel,

whether or not prejudice flowed from the

interceptions. Concluding that no conviction can

14

stand when the government interferes with

effective assistance of counsel, the court ordered

a hearing to determine the truth of Coplon’s

allegations, stating that a new trial would be

ordered if the allegations were true.

The Coplon court’s assumption that all

government intrusions interfere with the

effectiveness of attorney-client communications

does not, however, deal adequately with the

actual effects of an interception. Since the

standard does not demand that government

activity actually hinder the accused’s defense, it

might be applied even when a government

interception was both accidental and harmless to

the accused. In such a case, the defendant would

have received effective assistance of counsel, and

the grant of a remedy would be neither

constitutionally impelled nor necessary to protect

the interests of the defendant or of society.

Although the courts may devise a rule that

punishes governmental misconduct regardless of

its effect on a specific defendant in order to

ensure that constitutional rights will be observed

in other circumstances, such a rule should be

applied only when meaningful — that is, when

government has knowingly intruded on

defendant and his attorney.

In order to support its unrealistic assumption, the

District of Columbia Circuit relied upon the

Supreme Court’s statement in Glasser v. United

States that ‘the right to have the assistance of

counsel is too fundamental and absolute to allow

courts to indulge in nice calculations as-to the

amount of prejudice arising from its denial.’

Read in light of the most recent precedent cited

15

for the support, however, the Glasser statement

does not demand the elimination of all

considerations of prejudice to the defendant;

rather, it creates a rebuttable presumption that

prejudice exists in cases of sixth amendment

violations. Under Glasser, if the government were

able to make an affirmative showing that no

prejudice resulted from its interference with the

privacy of attorney-client communications-the

burden of proof being borne by the government

due to the fundamental nature of the sixth

amendment right-then there would be no denial

of or interference with the accused’s right to

effective assistance of counsel. By construing

Glasser to dispense with any inquiry into the

effects of an interception by the government of a

communication between a lawyer and his client,

the Coplon court created a dilemma for courts

which hesitated to grant relief for totally

harmless government intrusions.

The Trial-Bar Rule

Perhaps realizing the expansive nature of the

right it had created, the Cop/on court attempted

to restrict its decision by limiting the remedy it

provided to the defendant. It established the trial-

bar rule, according to which government

interception of attorney-client communications

invalidates only the trial before or during which

the interception occurs. Considering the effects

that such interceptions can have on the accused

even in future trials, the uniform application of

this widely adopted limitation ignores the true

effects of an interception on a defendant, and,

therefore, cannot serve to vindicate fully his sixth

amendment right.

i

16

Soon after Coplon, the District of Columbia

Circuit itself recognized that a government

interception could have an effect on future trials.

In Caldwell v. United States, the court stated in a

footnote that a new trial would sufficiently

remedy a government intrusion unless the defense

showed that the government’s action prejudiced

the defendant in a manner which would ‘neces-

sarily render a subsequent trial unfair to the

accused.’ Since the chilling and _ socially

demoralizing effects will be greatest in cases of

clandestine activities, e.g., when the government

has deliberately tapped the telephone of a

defendant or his attorney, planted an agent in the

defense camp or indicted sham defendants

precisely because of their value as gatherers of

privileged information about the strategy of the

defense, courts should always penalize such

‘gross’ conduct without inquiring into whether or

not the defendant has been prejudiced by it. The

appropriate step is to dismiss the charges against

the defendant. Both society as a whole and the

courts in particular have a demonstrable interest

in applying this drastic remedy. The societal

interest lies in curbing abuses of governmental

power. Demoralization of the citizenry is the

inevitable consequence if the government can

play the role of ‘Big Brother’ with impunity. The

interest of the courts is narrower but nonetheless

real. Purposeful governmental intrusion into the

privacy of attorney-client communications

amounts to a subversion of the nation’s entire

system of criminal justice. Once this kind of

intrusion occurs, the adversary process crumbles;

the government has, in effect, perpetrated a fraud

upon the courts.”

17

In the concluding paragraphs, the author proposes a

remedy in the most serious cases of intrusion by government.

We characterize the Government’s conduct as most serious

because we have been unable to find any case where the

Government has induced the defendant’s own attorney to make

the recording. In Hoffa, the Supreme Court referred at 385 U.S.

306, to the intrusions of Caldwell, 209 F. 2d 879 and Coplon,

191 F.S. 749 as the “grossest” kind, and in neither of these two

cases did the defendant’s own attorney voluntarily reveal the

confidential information.

Further, said the Hoffa Court (at 385 U.S. 308):

“It is possible to imagine a case in which the

prosecution might so pervasively insinuate itself

into the counsels of the defense as to make a new

trial on the same charges impossible under the

sixth amendment.”

Similarly, this Court in United States v. Russell, 411 U.S.

423, 431-32 (1973) said that “we may someday be presented with

a situation in which the conduct of law enforcement agents is so

outrageous that due process principles would absolutely bar the

government from invoking judicial process to obtain a

conviction.”

It is respectfully submitted that in the case at bar,

unfortunately, that day has come.

In United States v. Rosner, 485 F. 2d 1213 (2d Cir. 1973) a

co-defendant was an informer and the defendant requested

dismissal without a showing of prejudice. The court said:

“A per se rule must. . .be thought of in terms

of sanction against the Government rather than

as a search for truth. Illegal wiretapping may be

so far beyond the bounds of Governmental

18

_ propriety that it is offensive to a rule of liberty

under law. (Katz v. United States, 389 U.S. 347,

88 S.Ct. 507, 19 L.Ed 2d 576 (1967). The use of a

dummy intrusion, is cut from the same cloth.

(Citations omitted). The intrusion by a paid

informer for the avowed purpose of listening to

defense secrets is not different ....

In all such cases the Government has been

treated as ruthless beyond justification. It has

stooped to conduct well below the line of

acceptability. These strictures, while legal

principles in constitutional terms, are also moral

judgments. They assess the guilt not of the

defendant but of the Government. The Supreme

Court in the Hoffa case, considered Coplon,

supra, and Caldwell, supra, so strongly urged

upon us by appellant, as cases which ‘dealt with

government intrusion of the grossest kind upon

the confidential relationship between the

defendant and his counsel.’ Hoffa v. United

States, supra, 385 U.S. at 306, 87 S.Ct. at 416.

When the Government is found guilty of such a

charge, the dereliction is more than the bungling

of the constable, in Judge Cardozo’s phrase.

(People v. Defore, 242 N.Y. 13, 150 N.E. 585

(1926). Jt is a corrupting practice which may

justify freeing one guilty person to vindicate the

rule of law for all others. See Mr. Justice Holmes

dissenting in Olmstead v. United States, 277 U.S.

438, 469, 48 S.Ct. 564, 72 L.Ed 944 (1928).”

(Emphasis supplied.)

The Second Circuit opined that the use of a dummy

defendant was the ultimate in chicanery of unlawful intrusion.

Not even they could have forseen the egregious conduct initiated

by the Government and carried out by defendant’s attorney in

the case at bar.

19

Under the circumstances, it is respectfully requested that

prosecutorial misconduct cases originating from the Third

Circuit be brought to a halt. As far back as 1972, in United

States v. Rispo, 460 F. 2d 965 (3rd Cir. 1972) the Government

had engaged in indicting dummy co-defendants to spy on

defense trial strategy. Ironically, the court appointed counsel in

that case was Arthur Kafrissen.

CONCLUSION

It is respectfully requested that this Honorable Court grant

the petition for the writ of certiorari.

Respectfully submitted,

s/ FRANCIS X. NOLAN

DONSKY KATZ LEVIN

DASHEVSKY

Attorneys for Petitioner

la

APPENDIX A — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE THIRD CIRCUIT

UNITED STATES COURT OF APPEALS

For the Third Circuit

No. 79-1515

No. 79-1463

UNITED STATES OF AMERICA, *

Appellee

v.

ROBERT SWINEHART,

Appellant in No. 79-1515

and

ROBERT PERRY,

Appellant in No. 79-1463

On Appeal From the United States District Court For the

Eastern District of Pennsylvania

(D.C. Criminal No. 78-00217-01)

Argued December 11, 1979

Before: ADAMS, ROSENN, and SLOVITER,

Circuit Judges

(Opinion Filed January 17, 1980)

2a

Appendix A

FRANCIS X. NOLAN, ESQUIRE

(Argued)

Donsky, Katz, Levin & Dashevsky, Esqs.

1315 Walnut Street - 15th Floor

Philadelphia, Pennsylvania 19107

Counsel for Appellant Swinehart

THOMAS COLAS CARROLL, ESQ.

(Argued)

Carroll, Creamer, Carroll & Duffy, Esqs.

326 Three Penn Center Plaza

Philadelphia, Pennsylvania 19102

Counsel for Appellant Perry

PETER F. VAIRA

United States Attorney

WALTER S. BATTY, JR.

Assistant United States Attorney

Chief, Appellate Section

ELIZABETH K. AINSLIE

Assistant United States Attorney

GARY S. GLAZER

Assistant United States Attorney

ALFRED A. GOLLATZ (Argued)

Assistant United States Attorney

Room 3310 U.S. Courthuuse

601 Market Street

Philadelphia, Pennsylvania 19106

Counsel for Appellee

ROSENN, Circuit Judge.

The single question presented on this appeal is whether the

Government’s “sole discretion” to determine the defendants’

cooperation under a plea bargaining agreement could be based

exclusively on their failure of polygraph examinations. We

conclude that the present record is unclear as to what extent the

3a

Appendix A

Government could, and did, rely on the polygraph iests and

therefore vacate the judgment of the district court and remand.

On June 28, 1976, Robert Swinehart and Robert Perry were

indicted on 21 counts of embezzlement and bankruptcy fraud

arising from their activities as part owners of Hourly

Messengers, Inc. The planned trial was preceded by a two-week

suppression hearing concerning whether the Government's

proposed evidence was derived from sources independent of

immunized testimony. The trial court denied the motions to

suppress.

Plea negotiations followed, leading to substantially identical

plea agreements for each defendant. They agreed to plead guilty

to certain counts of the indictment in exchange for the dismissal

of other counts. In the plea agreements, the Government agreed

to seek a specific sentence for each defendant in the event it

obtained his cooperation as determined by the Government in its

“sole discretion.” Among the obligations in the agreement, each

defendant agreed to “take” a polygraph examination. If the

defendants cooperated, the Government agreed that the

appropriate sentence for Swinehart would be one year and six

months and one year and one day for Perry. Both also would be

placed on probation for five years and make restitution of

$13,470. The crux of the agreements containing the various

promises is:

Defendant ...has further offered and hereby

agrees to fully cooperate with Government attorneys and

investigators on all matters of interest to the

Goverment. By the term “fully cooperate”, defendant

agrees that he will provide ful! and truthful responses to

all questions asked and he will voluntarily disclose

complete knowledge and information regarding all

matters which are of interest to the Government. In

4a

Appendix A

addition, he will provide truthful testimony pursuant to a

subpoena in any proceeding including Grand Jury and

whatever trials the Government deems his testimony

desirable.

Under this agreement to fully cooperate with the

Government, defendant agrees that he is obligating

himself to provide truthful testimony and unreserved

disclosure regarding any and all of the above matters of

which he has knowledge and information....

Furthermore, defendant agrees to take any such

polygraph examinations as the Government shall, from

time to time, reasonably require. Any false statement

made by defendant to any Grand Jury or at any court

hearing or trial can and will be prosecuted under

appropriate perjury statutes.

If defendant does fully cooperate with Government

attorneys and investigators on all matters of interest to

the Government, the Government will state to the Court

at time of sentencing that it has obtained such

cooperation. The Government has the sole discretion to

determine whether or not the defendant’s disclosures and

testimony amount to full cooperation, within the terms

of this agreement.

Both defendants entered guilty pleas before the trial court in

accordance with the agreements. Sentencing was delayed to

allow Perry and Swinehart to provide the tendered cooperation.

Government agents proceeded to interview each of the

defendants on several occasions and they answered questions

dealing with matters of governmental interest.

In accordance with the agreement, Swinehart submitted to

an FBI polygraph examination. The examination, administered

by Special Agent Frank Cryan, showed that Swinehart failed -

several questions. Swinehart thereupon decided to take a private

Sa

Appendix A

polygraph test and consulted J.R. Pearce, a retired head of an

FBI polygraph unit, who was one of Cryan’s teachers. Swinehart

passed the Pearce polygraph test.

Perry then took his polygraph examination with Cryan.

Cryan concluded that Perry failed certain questions, all of which

dealt with Swinehart’s ability to pass his second polygraph

examination. Perry then went to Pearce, who concluded that

Perry passed some relevant questions and failed others.

The Government informed Perry and Swinehart that it

deemed them not to have cooperated fully under the terms of the

agreement. Both Perry and Swinehart filed motions to withdraw

their guilty pleas or, alternatively, for specific enforcement of the

plea agreements. The defendants argued that the agreements

required them to “take” polygraph examinations, not “pass”

them, and that the Government relied exclusively on the

examination failures in concluding that the defendants had not

fully cooperated within the terms of the plea agreements.! Perry

and Swinehart both alleged that earlier drafts of the plea

agreements had required them to “pass” the polygraph

examination and that they specifically negotiated to only “take”

the polygraph instead of “pass” it so that the Government could

not rely solely on the test.

1. On appeal Swinehart also argues that the district court relied on tapes

between Swinehart and the attorney-part-owner of Hourly Messengers, Inc., in

violation of the Sixth Amendment and attorney-client privilege. We reject this

argument for several reasons. First, Swinehart never met his burden of proving

an attorney-client relationship. In re Grand Jury Empanelled February 14,

1978: Nathan Markowitz, No. 79-1684 (3d Cir. July 23, 1979). Second,

Swinehart never objected to the introduction of tapes on attorney-client

grounds at the suppression hearing before trial. Third, this question was not

previously raised in the district court and there was no evidence the court relied

on the tapes at sentencing. Inasmuch as the material dealing with this attorney-

client problem really is not implicated in this appeal, we see no reason for

requiring the trial court and counsel, as the concurrence suggests, to further

explore the matter.

6a

Appendix A

The district court heard the defendants’ allegation but did

not take any evidence other than an affidavit by Perry, accepted

as an offer of proof, concerning the change of the word “pass” to

“take.” Focusing only on the language of the plea agreements,

the trial judge reasoned:

1 do not believe that the Government can be said to have

abused its discretion where it relied upon the results of

that polygraph in the absence of a finding of bad faith.

Notwithstanding what may have been in the minds

of defendants, the plea agreement is clear and

unambiguous. The Government retains sole discretion —

| emphasize the words “sole discretion” — to determine

if there has been full cooperation. | must give those

words their normal and generally understood meaning.

The court concluded that the Government had not acted in bad

faith in exercising its “sole discretion” and denied the motions

for withdrawal of the pleas or for specific enforcement of the

agreements. Perry was sentenced to one and a half years and

Swinehart three years in prison. Both defendants were also

placed on probation for five years and were required to make

restitution in the amount of $13,470. Both Perry and Swinehart

appeal, claiming that the Government could not rely exclusively

on the polygraph examinations in exercising its “sole discretion.”

The standard by which a trial court determines whether a

plea may be withdrawn is “fairness and justice.” Paradiso v.

United States, 482 F.2d 409, 416 (3d Cir. 1973); United States v.

Stayton, 408 F.2d 559, 561 (3d Cir. 1969). “The court in exercise

of its discretion will permit one accused to substitute a plea of

not guilty and have a trial if for any reason the granting of the

privilege seems fair and just.” United States v. Stayton, supra,

408 F.2d at 561, quoting Kercheval v. United States, 274 U.S.

220, 224 (1927).

Ta

Appendix A

The district court concluded that Perry and Swinehart

should not be permitted to withdraw their guilty pleas because,

inter alia, they had knowingly and voluntarily given the

Government the “sole discretion” to determine whether they had

cooperated. Perry and Swinehart argue on appeal that the

Government improperly based its “sole discretion” exclusively

on the polygraph examinations contrary to the intent of the

parties, manifested in the change from the “pass” requirement to

the promise to “take” the polygraph examination.? The district

court did not make a finding whether such a change was in fact

made. Assuming arguendo that it was, we conclude that the

intent of the parties in substituting the word “take” for the word

“pass” is unclear on the present record. We therefore vacate the

judgment of the district court and remand for further findings.

In United States v. Crusco, 536 F.2d 21 (3rd Cir. 1976), the

defendant alleged that he understood the term “sentence,” as

promised in a plea bargain, to include parole time as well as the

time of confinement. The Government and the district court

understood “sentence” to mean only the period of incarceration.

In permitting withdrawal of the plea, this court stated that

“[w]here the record shows that ‘circumstances as they existed at

the time of the guilty plea, judged by objective standards,

reasonably justified his mistaken impression,’ a defendant must

be held to have entered his plea without full knowledge of the

consequences and involuntarily.” /d. at 24.

On the present record it is unclear whether (1) a change was

made in the language of the plea agreement; and (2) if there

were, whether Swinehart and Perry could have reasonably

believed that the Government could not rely exclusively on the

2. Perry and Swinehart also argue that reliance on the polygraph is

impermissible, regardless of the plea agreement, because of the inadmissibility

of lie detector evidence at trial and general unreliability of polygraph results.

Although the infallibility of polygraphs is arguable, we decline to hold that the

Government cannot rely on the tests where the parties agree to such reliance in

a plea bargain.

8a

Appendix A

failure of the polygraph examination. Under such circumstances,

the district court should conduct a hearing to determine the

validity of defendants’ claims. The court should examine the

circumstances surrounding the plea bargain and the alleged

change in content, and determine the reasons why the

defendants sought, and the Government agreed, to change the

requirement of passing the polygraph examination.?

The Government argues that it is not limited in the factors

it could consider, as long as it acts in good faith, because the

agreement vests it with “sole discretion.” We find some factual

similarity in United States v. Simmons, 537 F.2d 1260, 1261 (4th

Cir. 1976), where the court held that there are limits to the

Government’s discretion which need not be specified in the plea

agreement. In Simmons, the plea bargain guaranteed “the

defendants’ full, complete and truthful cooperation” in exchange

for a Government recommendation of a 15-year sentence. The

Government concluded there was not full cooperation and did

not recommend the 15-year terms. The court, in vacating the

sentences and remanding for a hearing, stated “[t]here would be

a manifest impropriety in permitting the government, without

satisfying a judge that the evidence proves that a defendant

broke his promise, to escape from the obligation the government

undertook in the plea bargain.” /d. at 1261-62. The court in this

case distinguished Simmons on the ground that the plea

agreements here specifically gave the Government “sole

discretion.”

3. At oral argument, Perry's attorney asserted that it was commonly

known among the defense bar that an agreement to “take” a polygraph

examination does not require that one pass. He asserted that the reason for the

examination is so the Government can evaluate the truthfulness. of the

information in the investigative process, not to determine if the defendant is

cooperative. The Government argued that it was unaware of any accepted

meaning to the terms “pass” and “take.” The Government said each plea

agreement has its own meaning. On remand, the district court may want to

inquire whether there is any customary meaning among defense attorneys and

the Government regarding these terms.

9a

Appendix A

The use of the term “sole discretion” in a plea agreement

ordinarily would give the prosecution a broad authority to

ascertain whether the accused has cooperated. But when a

defendant charges that the exercise of that discretion is

improperly predicated upon a test to which the defendant has

submitted, then the trial court, because it has judicially approved

the bargain, has a duty to inquire whether the terms have been

followed. The court, however, should not substitute its judgment

for the judgment vested by the defendant in the Government

under the plea agreement but, likewise, should not permit the

Government to use its “sole discretion” to disregard its

contractual commitments.

In determining whether the parties intended that the

Government could rely exclusively on the polygraph

examination, contract analogies may be helpful. See, e.g.,

United States v. Roberts, 570 F.2d 999, 1008 (D.C. Cir. 1977).

The Government will not be allowed to avoid the

obligation it... incurred by claiming now that te

language literally promises nothing to the defendant. A

plea agreement is not an appropriate context for the

Government to resort to a rigidly literal approach in the

construction of language.

United States v. Bowler, 585 F.2d 851, 854 (7th Cir. 1978). The

trial court must consider the plea bargain in light of the

important constitutional rights being waived by the defendant.

Jones v. Estelle, 584 F.2d 687 (Sth Cir. 1978).

Because of the unique nature of a plea bargain, involving as

it does the waiver of constitutional rights, we believe the parol

evidence rule should not be rigidly applied to bar evidence which

would aid the trial court in properly construing the plea

agreement. Thus, evidence of a prior draft plea agreement, or of

statements made by the prosecution during the plea bargaining

which sheds light on the meaning of a pertinent word or phrase

in an “integrated” plea agreement would be admissible.

10a

Appendix A

The Government also argues that it did not rely exclusively

on the polygraph failures in determining that Perry and

Swinehart had not cooperated. The district court did not

confront this issue since it believed the Government had the

right to rely exclusively on the polygraph tests. On remand, if

the district court finds that the Government could not rely solely

on the tests, it should consider whether the Government reached

its decision on other relevant factors.

An examination of the evidence by the district court should

reveal the intent of the parties. A hearing is especially

appropriate in this case because the defendants’ allegations

pertain to purported occurrences outside the presence of the trial

court. Marchibroda v. United States, 368 U.S. 487, 494 (1962);

United States v. Marzgliano, 588 F.2d 395, 399 (3d Cir. 1978).

The court is in the best position to ascertain the facts, assess the

intent of the parties under the plea agreement and, if it was

breached, to exercise its discretion and fashion an appropriate

remedy. United States v. Bowler, supra, 585 F.2d at 856.

It is indeed unfortunate that after a carefully considered

plea bargain designed to avoid an _ evidentiary hearing

concerning guilt, we are now required to remand for an

evidentiary hearing as to the terms and meaning of the plea

bargain agreement. However, important constitutional rights of

the defendants are at stake and, in the interest of fairness and

justice, the necessary inquiry must be made. The judgment of the

district court will be vacated and the case remanded for further

proceedings not inconsistent with this opinion.

SLOVITER, Circuit Judge, Concurring and Dissenting.

I concur in all parts of the majority opinion except footnote

| dealing with the second issue raised by appellant Swinehart.

He claims that the Government surreptitiously recorded

conversations between him and his attorney, that those

lla

Appendix A

conversations were used to induce the trial court to double the

previously agreed upon sentence, and that the actions of the

Government in this respect constituted such an egregious

intrusion into the confidential relationship between him and his

attorney that he is entitled to dismissal of all charges against

him. The Government admits that Kafrissen, a shareholder of

Hourly Messengers, Inc. who also served as its attorney, agreed

to and did record conversations which he had with Swinehart,

that transcripts of some of these conversations were marked as

exhibits for use at trial, and that at the hearings on appellants’

motions to withdraw their guilty pleas they were used for the

purpose of showing inconsistencies between the facts as they

were told to Kafrissen and as they were given to the Government

polygrapher. The Government argues that Swinehart failed to

prove an attorney-client relationship between him and Kafrissen,

and that he waived any objection to the use of these taped

conversations because he failed to invoke the claim of attorney-

client privilege or violation of his rights under the Sixth

Amendment at the time the transcripts were originally marked

as exhibits. It admits that Swinehart did claim attorney-client

privilege in objecting to the introduction of the transcripts at the

hearings on appellants’ motions to withdraw their guilty pleas.

Swinehart argues that there was no need to object to the

marking of the transcripts for the trial proceeding because the

Assistant U.S. Attorney had represented that the transcripts

would not be used as part of the Government's evidence in chief,

and Swinehart attaches to his reply brief on appeal an affidavit

to that effect by his trial counsel.

The record on these issues is not complete. It is not clear

whether the relationship between Swinehart and Kafrissen was

that of client and attorney, or whether, even if not, the

statements of Swinehart were made under circumstances which

would entitle him to a reasonable expectation that they were

protected communications. The facts on possible waiver of his

rights by Swinehart have not been developed. Since all members

of the panel agree that this case should be remanded for hearing

12a

Appendix A

on the issue of the plea agreement, | would also remand for

determination of the nature of the relationship between

Swinehart and Kafrissen. The burden is on Swinehart to prove

the existence of an attorney-client relationship. /n re Grand Jury

Empanelled February 14, 1978: Nathan Markowitz, 603 F.2d

469, 474 (3d Cir. 1979). The relationship may have been that of

two business colleagues concerned about possible investigation.

See, e.g. United States v. Stern, 511 F.2d 1364 (2d Cir.), cert.

denied, 423 U.S. 928 (1975). On the other hand, if the

relationship between Swinehart and Kafrissen was a confidential

one, then the court would have to determine whether its invasion

by the Government was intentional or prejudicial, see Weathford

v. Bursey, 429 U.S. 545 (1977), whether Swinehart preserved his

rights, and if so, the appropriate sanction to be applied. See

O’Brien v. United States, 386 U.S. 345 (1967) (per curiam);

Black v. United States, 385 U.S. 26 (1966) (per curiam). These

issues should be considered in the first instance by the trial

court.

The allegations by Swinehart charge purposeful

governmental intrusion into the privacy of the attorney-client

communications. They may prove to be without foundation in

fact. However, if proven, they would represent serious

Government misconduct meriting effective judicial response. At

a minimum, appellant Swinehart is entitled to a hearing at which

there can be full-scale development of the facts. O’Brien y.

United States, 386 U.S. at 346 (Harlan, J., dissenting); Black v.

United States, 385 U.S. at 31 (Harlan, J., dissenting).

A True Copy:

Teste:

Clerk of the United States Court of Appeals for the Third

Circuit

l3a

APPENDIX B — JUDGMENT OF THE UNITED STATES

COURT OF APPEALS FOR THE THIRD CIRCUIT

UNITED STATES COURT OF APPEALS

For the Third Circuit

Nos. 79-1463 and 79-1515

UNITED STATES OF AMERICA

VS.

PERRY, ROBERT*F.,

Appellant in No. 79-1463

(D.C. Crim No. 78-00217-01)

UNITED STATES OF AMERICA

VS.

SWINEHART, ROBERT J.,

Robert Swinehart,

Appellant in No. 79-1515

(D.C. Crim. No. 78-00217-02)

ON APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE EASTERN DISTRICT OF

PENNSYLVANIA

Present: ADAMS, ROSENN and SLOVITER, Circuit Judges

This cause came on to be heard on the record from the

United States District Court for the Eastern District of

Pennsylvania and was argued by counsel on December I1, 1979.

14a

Appendix B

On consideration whereof, it is now here ordered and

adjudged by this Court that the judgment of the said District

Court, filed March 22, 1979, be, and the same are hereby

vacated and the cause remanded for further proceedings not

inconsistent with the opinion of this Court.

ATTEST:

S/

Clerk

January 17, 1980

15a

APPENDIX C — PETITION FOR REHEARING OF THE

UNITED STATES COURT OF APPEALS FOR THE THIRD

CIRCUIT

UNITED STATES COURT OF APPEALS

For the Third Circuit

No. 79-1515

UNITED STATES OF AMERICA

v.

SWINEHART, ROBERT J.,

ROBERT SWINEHART, Appellant

Present:

SEITZ, Chief Judge, ALDISERT, ADAMS, GIBBONS,

ROSENN HUNTER, WEIS, GARTH,

HIGGINBOTHAM, and SLOVITER, Circuit Judges

The petition for rehearing filed by

Appellant

in the above entitled case having been submitted to the judges

who participated in the decision of this court and to all the other

available circuit judges of the circuit in regular active service,

and no judge who concurred in the decision having asked for

rehearing, and a majority of the circuit judges of the circuit in

regular active service not having voted for rehearing by the court

in banc, the petition for rehearing is denied.

By the Court,

-~ s/ Max Rosenn

Judge

Dated: March 7, 1980

l6a

APPENDIX D — ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE THIRD CIRCUIT

DATED APRIL 7, 1980

No. 79-1515

UNITED STATES OF AMERICA

vs.

ROBERT J. SWINEHART,

Appellant

Pursuant to Rule 41(b) of the Federal Rules of Appellate

Procedure, it is O R D E R E D that issuance of the certified

judgment in lieu of formal mandate in the above cause be, and it

is hereby further stayed until May 6, 1980.

s/ Max Rosenn

Circuit Judge

Dated: April 7, 1980

17a

APPENDIX E — ORDER EXTENDING TIME OF THE

SUPREME COURT OF THE UNITED STATES DATED

APRIL 4, 1980

SUPREME COURT OF THE UNITED STATES

No. A-858

ROBERT J. SWINEHART,

Petitioner

V.

UNITED STATES

ORDER EXTENDING TIME TO FILE PETITION FOR

WRIT OF CERTIORARI

UPON CONSIDERATION of the application of counsel

for petitioner(s),

IT IS ORDERED that the time for filing a petition for writ

of certiorari in the above-entitled cause be, and the same is

hereby, extended to and including May 6, 1980.

s/ William J. Brennan, Jr.

Associate Justice of the Supreme

Court of the United States

Dated this 4

day of Aprii, 1980.

18a

APPENDIX F — EXCERPTS OF MOTION TO SUPPRESS

DATED OCTOBER 4, 1978

[Commencing at page 7-24]

CROSS EXAMINATION OF A. KAFRiSSEN:

* * *

not to volunteer information to you that he testified about

before the bankruptcy court? A. No.

Q. Prior to going to these three meetings, were you advised

by the FBI not to ask questions or solicit information which

could have been derived or stated by Mr. Swindhart [sic] before

the bankruptcy court? A. No.

Q. During your conversations with the FBI, did they ever

give you any indication that they were aware of some of the

topics that were discussed before the bankruptcy

court? A. No. |

Q. Sir, before you engaged in these conversations with Mr.

Swinehart, were you advised to cover certain topics? A. Yes.

Q. Am _ I correct, sir, in that at least one of the

conversations and | believe it was in July of 1976, that there was

quite an extensive discussion of the pension funds? Do you recall

that? A. Which conversation was that? Perhaps it would help

me to know that.

Q. Any of the three conversations. A. There probably

was.

[7-44] cooperative. I don’t understand what you are after.

Q. Did you agree to assist the Government to obtain

evidence against other persons? A. No, but I agreed to answer

_

19a

Appendix F

whatever questions were asked of me and to cooperate in

whatever investigation there was.

Q. Did the Government not make any threat to you in

order to get you to wear a body recorder? A. No.

Q. You were not threatened with prosecution? A. No.

Q. No inducement was made to you? A. It is very

difficult to say — I don’t understand exactly what you mean by

“inducement.”

Q. Did you wear the body recorder? A. I knew there was

an ongoing investigation of Hourly Messengers. | had been

contacted by the Government. There was never a grant of

immunity or anything like that. They simply said that if I

cooperated and what I said was relevant, | would be treated

accordingly — not relevant, what I said was truthful, | would be

treated accordingly and I did and they never threatened to

prosecute or promised not to prosecute.

Q. One of the later body recorders that you [7-45] wore was

an interview with your own former client, Mr. Swinehart; wasn’t

it? A. Yes.

Q. Did your decision to wear a body recorder, was that at

all influenced by the fact that these men had told you that if

what they had done and they admitted to in the bankruptcy

court was illegal, that they would plead guilty? A. No.

Q. Did that play any part in your decisions? A. No.

MR. CARROLL: | have nothing further.

THE COURT: Mr. Murphy?

MR. MURPHY: I have no questions.

20a

Appendix F

THE COURT: Anything else?

MR. BATTY: Yes, Judge, | have just a couple of questions.

THE COURT: All right

REDIRECT EXAMINATION

BY MR. BATTY:

Q. In response to a question by Mr. Kidd about, are there

other statements or conversations that you had with the FBI

beyond the 302’s, did you understand him to-mean are there

other occasions on which you talked to the FBI other than those

reflected in the

[7-25]

Q. Am I correct in assuming that that topic was suggested

to you to be covered in that meeting by the FBI? A. Yes.

Q. And, did they more specifically tell you to cover the sale

of the stock and the cashing in the savings certificates and issues

such as that? A. I don’t recall how specific they were.

Q. But it was clearly your understanding to explore that

topic — A. Yes.

Q. — during those conversations? A. Yes.

Q. It is also clear that no one told you not to solicit any

information which may have been volunteered or given to the

bankruptcy court? A. Yes. |

Q. During any of the times that you were dealing with the

FBI, did they alert you to a potential problem concerning the

2la

Appendix F

immunity that Mr. Swinehart and Mr. Perry had with regard to

their testimony before the bankruptcy court? A. Yes.

Q. They did? A. Yes.

22a

APPENDIX G — EXCERPTS OF TRANSCRIPT OF

CONVERSATIONS DATED OCTOBER 27, 1976

* * *

demonstrable proof that the attorney client relationship existed,

and that when the Government introduced the tapes into

evidence, that the Government had established the attorney

client relationship and it was not necessary for the defendant to

put on additional proof of that fact. In support of this

statement, defendant Swinehart quotes from various pages of

the surreptitiously recorded conversations:

Page

9 Conversation of 10/27/76 (establishing confidentiality):

Kafrissen to Swinehart: “Well | have been kind of

curious to know what the hell it was about because you

could not talk on the phone.”

In the following quotations, Swinehart is discussing with

Kafrissen a proposed business venture and is specifically asking

legal advice as to whether or not the proposed business venture

would be violative of any Federal or State law and whether or

not certain forms would be in compliance with the law:

Page

ae Conversation of 10/27/76:

Swinehart to Kafrissen: “| just want to be assured of

three things, that it is not in violation of any Federal

Law, mail fraud, mail fraud especially because

everything’s through the mail or any State laws.”

24 Conversation of 10/27/76:

26

28

36

37

59

23a

Appendix G

Swinehart to Kafrissen: “| can bring in the money, no

problem, I| can set up offices, but | want to be sure | am

legal before I do it.”

Conversation of 10/27/76:

Kafrissen to Swinehart: “Yea, well | agree with this part

of the legal,” .. . “Forget morals, no, it’s legal,”

Conversation of 10/27/76:

Kafrissen to Swinehart: “That, you know I said okay

that’s legal. Granted, This is legal, and granted this lease

will work.”

Conversation of 10/27/76:

Swinehart to Kafrissen: “| don’t want to be a

shakedown. I want to be able to legitimately earn those

fees”, (and at the bottom of said page): “I don’t want to

go to jail for mail fraud, 1 don’t want any mail fraud, |

don’t want it to be illegal as long as I can (unintelligible)

and have a good as long as I| am legal it’s a hell of a

business.”

Continuing:

“But I want to be legal. I will not do it (unintelligible) I'll

go to work when he closes up and I will be in the same

boat I was in years ago. (The middle of page 37):

Swinehart to Kafrissen: “| don’t think its clear enough

for somebody to write it on their own. I said the hell

with it, let me write it, tell me is it legal?”

Conversation of 10/27/76:

Kafrissen to Swinehart: “Well I'd like to look it

over ...to read the whole thing.”

67

71

77

82

102

24a

Appendix G

Swinehart to Kafrissen: “| don’t mind aggravation as

long as I know I’m right.”

Kafrissen to Swinehart: “| understand that.”

Swinehart to Kafrissen: “You're saying just as long as its

legal, it’s you know, big deal.”

Swinehart to Kafrissen: “I'm going to form a

corporation. What are you going to charge me... I'll

Start sending you money on the corporation, okay.”

Swinehart to Kafrissen; “If it’s illegal, you're doing

something wrong.”

Kafrissen to Swinehart: “You're not doing anything

illegal.”

Kafrissen to Swinehart: “Well | would say that you know

in my opinion ...1 haven’t read the lease, ... What

you are saying seems to make sense-it would seem to be

legal.”

Conversation of 10/27/76:

Kafrissen to Swinehart: “Vil go over this thing

tomorrow ... and let me check the laws, see what the

Federal and State laws are and then I'll give you an

answer ...1 mean I'll give you an answer as to the

legality of the whole deal.”

25a

APPENDIX H — AFFIDAVIT OF RONALD F. KIDD

DATED OCTOBER 24, 1979

IN THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

UNITED STATES OF AMERICA,

Appellee

V.

ROBERT F. PERRY

ROBERT F. SWINEHART,

Appellants

NO. 79-1515

COMMONWEALTH OF PENNSYLVANIA:

SS

COUNTY OF PHILADELPHIA

I, Ronald F. Kidd, Esq., being duly sworn according to law,

depose and say that | am a member of the bar of the Supreme

Court of Pennsylvania, and was trial counsel in the above case,

and that trial counsel for the government was Alfred A. Gollatz,

Esq.

At or about the time of a pre-trial suppression hearing, Mr.

Gollatz advised me that the government did not intend to use

the transcripts of taped conversations between defendant

Swinehart and Arthur Kafrissen as part of their evidence-in-

chief.

s/ Ronald F. Kidd

Ronald F. Kidd

26a

Appendix H

Sworn to and subscribed

before me this 24 day

of October, 1979

s/ Virginia K. Kotbinski

Notary Public

Virginia K. Kotbinski, notary public

Philadelphia Phildelphia County

My Commission Expires Jan. 23, 1982

Member, Pennsylvania Association of Notaries

27a

APPENDIX I — EXCERPTS OF TRANSCRIPT OF

SENTENCING DATED MARCH 19, 1979

DIRECT EXAMINATION OF W. HEILMAN

[Commencing at page 217]

+ * *

we completed our interviews, under the plea bargain agreement,

| later went back and reviewed the transcript, what was

contained in the transcript, and,compared it to what he had told

me earlier.

Q. Was there anything in the transcripts — in any of the

transcripts — which might be at odds with what he told you

during the course of your interviews with him? A. There were

several points.

Q. Well, with respect to capitalization? A. Well, | do

recall on the 10/27/76 transcript —

Q. Which is Exhibit 15? A. Yes.

MR. KIDD: I am going to object to all testimony

regarding Government Exhibits 15 and 16. For purposes of the

Court’s information, I believe these are two transcripts of

consentual monitoring between Mr. Swinehart and Mr.

Kafrissen and at that time, Mr. Kafrissen was Mr. Swinehart’s

lawyer. So that there is a serious question as to the attorney-

client privilege. At that time, he was currently representing him

and had represented him in the past.

THE COURT: Mr. Gollatz?

[218] MR. GOLLATZ: | think if your Honor reads the

transcript, | don’t think the attorney-client privilege applies to

these particular transcripts, number one, because it would be the

Government’s position that these documents are — the advice

28a

Appendix 1

was being sought for the purposes of perpetrating a fraud. |

don't think we need get that far.

The question is whether the Government acted in good faith

in this regard.

Agent Heilman testified that he has looked at the transcript

and he has acted upon that advice. The question is not

evidentiary, whether we are admitting the truth — admitting

these transcripts as such, the conversations. All it is is to show

the Court that we do have inconsistent statements. So therefore,

we have a basis for saying they have not cooperated.

So, therefore, | don’t believe the privilege applies. The

Government could, for example, even have, relied on things

which were covered by the Fifth Amendment privilege in this

regard.

THE COURT: Just a moment, gentlemen.

What you are saying, Mr. Gollatz, is

* * *

[220] quote:

“Unintelligable part of the tape.”

“— he got from the loan sharks, yeah.”

Q. Who was speaking at that time? A. That was Mr.

Swinehart speaking to Mr. Kafrissen and they were talking

about how Mr. Swinehart got started in the business, AID

Leasing.

Q. Did you discuss with Swinehart during the course of

your interviews with him whether or not Mr. Schwartz had

29a

Appendix |

intended to file for bankruptcy for AID Leasing? A. Yes, I

asked him whether bankruptcy was the ultimate goal of the

company and he indicated that he did not have any knowledge

of that. He believed it is possible, but did not know for sure.

Q. Did your review — by the way, what particular 392 are

you relating there? A. Just a minute.

Q. | have in my notes it is the 11/8/78, which is

Government Exhibit 8. A. I will check my notes.

Q. Page 4. A. I have that also, 11/8/78, 302. Mr.

Swinehart

[222] a conversation between Mr. Schwartz and Mr. Swinehart

where Mr. Schartz told Mr. Swinehart he was taking money out

of AID on a weekly basis to pay off a past problem at AID.

Q. Before you, do you have any Government exhibits

relating to that interview with Delmartin? A. No, I believe I

previously furnished them to you.

Q. In the original page of exhibits that I have before you,

would you look at Government Exhibit 13? A. Yes, I have it.

Q. And is that your 302 of an interview with

Delmartin? A. Yes, that is correct.

Q. On page 7, is that the reference that you are

making? A. Yes.

Q. During your interviews with Mr. Swinehart, did he ever

discuss with you when he first learned or first believed that AID

Leasing was a fraudulent leasing company? A. He indicated he

had been there six months before he realized Mr. Schartz was

operating a fraudulent company.

30a

Appendix |

Q. Was that consistent or inconsistent with any [223] other

statements or facts you discovered during your

investigation? A. I believe ‘it is.

Q. Is what — inconsistent? A. | believe it is inconsistent

with information that appeared on this 11/27/78 — excuse me

— the 11/8/76 transcript.

Q. Which is Government Exhibit 16? A. Yes.

Q. Could you cite a _ particular reference to the

Court? A. Mr. Schwartz is explaining here — Mr. Swinehart,

they are talking about what will eventually happen to AID and

he explains —

Q. When you refer to the transcript would you try to give a

page citation? A. Page 86 of the 11/8/76 transcript. Mr.

Swinehart is talking about what will evenutally happen at AID

and he says:

“That is right. He did it at Wayne Equity, he

did it at FID Leasing. Both of these companies,

one filed bankruptcy and one just closed its doors

and the principals disappeared.”

Also, page 138 of that same transcript. [224] he is talking

about Mr. Schwartz’ background to Mr. Kafrissen. He indicates:

“He was in the black market during the war

”

Q. “He” being Mr. Schwartz? A. “He” being Mr.

Schwartz.

“He has always been a wheeler-dealer kind

of promoter, but he always has that knack of

being in trouble.”

3la

Appendix I

Also, on page 86 of that same transcript, Mr. Swinehart

says:

“If you could only spend a week in that

office.” ‘

Q. Now, during the course of your investigation of AID

Leasing, did you it:vestigate who approved the deals or was

responsible for approving the leasing arrangements? A. Yes, |

was trying to fix responsibility in the operation, who was in

charge, who actually would approve the deals.

Q. Did you discuss that with Mr. Swinehart? A. Yes, |

did.

Q. What did he tell you? A. He indicated Mr. Schwartz

approved all the deals and he personally handled and approved

all the

[226] not consider himself an officer in the company.

Q. Now— A. Also, the district attorney's

communication to me indicates from the district attorney's office

that Scheiber was considered the vice president of sales. On the

10/27/78 — excuse me — the 11/27/78 —

Q. 1976? I think you are confusing it. A. | may be slightly

confused myself.

Q. Mr. Swinehart told you that Scheiber did not consider

himself to be an officer of the company; is that

correct? A. Yes.

Q. And, what information do you have that is inconsistent

or in opposition to that? A. We have on page 132 of the

32a

Appendix |

11/8/76 transcript, we had Mr. Swinehart saying to Mr.

Kafrissen:

“Scheiber is an officer of the company.”

Also, as I mentioned before, the district attorney's

communication where he indicates to the district attorney that

he was considered vice president of sales.

Q. That is Exhibit 14? A. Yes.

Q. Now, did your inquiries of Mr. Swinehart during

* * *

[228] Q. Did you review the transcripts regarding Mr.

Sindone’s relationship to Mr. Schwartz and possibly the funding

of AID Leasing through Mr. Sindone? Was there any reference

in the transcript to that effect? A. About funding between Mr.

Sindone and Mr. Schwartz?

Q. Or any relationship between Mr. Schwartz and Mr.

Sindone and Mr. Swinehart? A. Well, as it was mentioned

earlier before, | had trouble locating the reference on the

10/27/76 transcript. They were talking about how Mr. Schwartz

got capitalized and Mr. Schwartz said he got it from the loan

sharks. That refers to the possible capitalization of AID Leasing

on Mr. Schwartz’ behalf. There are several references, | guess,

between Mr. — where Mr. Swinehart explains his dealings with

Mr. Sindone.

Q. Is there any reference as to how Mr. Swinehart met Mr.

Schwartz? A. Well, I think he indicates on the tape that Mr.

Schwartz and Mr. Sindone met during a loan sharking trial back

in approximately 1971. At that time Mr. Sindone introduced

Mr. Swinehart and Mr. Schwartz.

33a

Appendix I

Q. During that transcript, is there any reference to how Mr.

Swinehart was going to get the funding to start ARCO

Leasing? [229] A. | believe there was some indication there.

He talks about on page II! from the 11/8/76 transcript —

Q. Which is Exhibit 16? A. That is correct.

Mr. Swinehart is talking about borrowing money to start

up ARCO Leasing and he indicates:

“Oh, I will get the five grand back —

(unintelligible) — downtown. Don’t get killed if

that’s what you are planning — no, I won't get

killed.”

Q. Have you made a determination in your own mind as to

whether or not Mr. Swinehart has given you all the information

about all of his dealings with Mr. Sindone? A. I don’t believe

he has given me all the information.

Q. During the course of your investigation, did you ever try

to determine how Mr. Swinehart might have come to meet Mr.

Sindone? A. I believe we asked him after he told us about the

initial borrowing incident, we asked him who referred him, and

he advised us that he did not remember who led him to the first

contact with Mr. Sindone.

Q. During the course of the polygraph reviews and I believe

those are of Mr. Swinehart’s commercial [230] polygrapher. Did

he state who referred him to Mr. Sindone? A. I believe that he

must have told his attorney or the commercial polygrapher it

was Mr. Jojo Scotti.

Q. Who is Mr. Scotti? A. | believe he is a salesman at

Wolfington Chevolet.

A. Is Mr. Scotti Alive? A. No, he is deceased.

34a

Appendix |

Q. Now — A. According to Mr. Swinehart. | am not ina

position to verify that now.

Q. During the course of your review of the transcripts, did

Mr. Swinehart say anything that was inconsistent with lack of

knowledge and with the fact that it was Mr. Scotti who

introduced him? A. On page I1 of the 10/27/76 transcript,

Mr. Swinehart is talking about his dealings with Mr. Sindone

and he indicates:

“Hey, Eddie — (unintelligible) — who got

me started — (unintelligible).”

I believe he is talking about the individual who got him in

touch with Frank Sindone.

Q. That was Government Exhibit 15 that you are talking

about? [231] A. Yes.

THE COURT: What page?

THE WITNESS: Page 11.

THE COURT: Thank you.

Q. Now, during the course of your interviews with Mr.

Swinehart, did you discuss what | will call a “TV caper” in any

way? A. Yes, we did.

Q. Could you describe for the Court, basically, what that

was? A. Well, Mr. Swinehart indicated that as a result of his

initial contact with Mr. Schwartz through the introduction of

Mr. Sindone, he and Mr. Schwartz became associated and

sometime later, agreed to participate in a scheme whereby Mr.

Schwartz could generate money that he needed to pay off Mr.

Sindone and this particular method was involving the fraudulent

obtaining of television sets from various manufacturers around

35a

Appendix I

town, having them delivered to a non-existent address and then

selling those particular television sets and obtaining the capital

for Mr. Schwartz.

Mr. Swinehart had also received a portion of the television

sets for himself.

Q. Now, when Mr. Swinehart discussed that with the FBI,

did he mention Mr. Sindone’s role in that [232]

activity? A. No, he did not.

Q. Now, are there any —

MR. GOLLATZ: Strike that.

Q. Are there facts or statements in your investigation which

indicate that Mr. Sindone might have had a more active

role? A. On page 12 of the 10/27/76 transcript, he indicates:

“Sindone introduced us and said ‘Bob, we

can set this deal up.’ Sindone promoted it.”

Q. And the reference is to that TV transcript? A. Yes.

Q. All right. A. Another thing Mr. Swinehart did not

mention was there was a Mr. Dortona involved in that

particular transaction.

Q. Now, during the course of your interviews with Mr.

Swinehart, did you remind him that he was to give unreserved

disclosures about these matters? A. 1 believe that was the

understanding or the agreement that he was going to provide

information, his complete knowledge of any criminal activities.

Q. Now, during the course of your investigation,

* * *

36a

Appendix I

CROSS EXAMINATION OF W. HEILMAN

* * *

[254] was doing. | think the approvals were granted by whoever

happened to be present in the office at the particular time. | am

not sure that any one person did approve the deals. Mr.

Schwartz was definitely in charge of the AID office. However,

Mr. Swinehart, I believe, wants us to believe that he in no way

had any part in approving the deals. Yet, during the transcripts

and he reviewed them, Mr. Swinehart will tell Mr. Kafrissen,

Schwartz does not approve the deals, we do everything. That's

not a direct quote.

I believe he also goes on to explain later on — Mr.

Kafrissen says, “Aren’t you worried about being criminally

involved in this?” He says, “No, If | am ever questioned, | am a

salesman. I am a salesman. | have no contact. All I do is tell

them that I did what somebody else directed me to do.” That’s

all in the transcript.

Q. So we are back to the transcript with respect to the

inconsistent statements Mr. Swinehart furnished to you when he

came in to give evidence? A. Yes.

Q. Do you have any other evidence? A. I believe | might

find some customer interviews where Mr. Swinehart told the

customer he was approved.

Q. Isn't it possible he could tell the customer

* * *

[259] orders.”

THE COURT: Mr. Gollatz, how, if you recall, precisely,

did you use Exhibit 14 on direct examination?

37a

Appendix I

MR. GOLLATZ: Exhibit 14 was primarily, to my

recollection, your Honor, used with respect to what Scheiber’s

activities in the firm were and if your Honor recalls that

Scheiber is primarily an employee of ARCO, Mr. Swinehart’s

company. That is one way it was used and it was also used in the

sense to show that Swinehart told us that Schwartz personally

looked at and approved all deals and Mr. Kidd is correct, there

was some — we did try to show that Schwartz or Scheiber

approved the deals as well, but then that was inconsistent with

what he said on the transcript, namely, that Schwartz does not

do anything we do.

THE COURT: Objection overruled.

Would you answer the question?

Do you wish to rephrase it, Mr. Kidd?

MR. KIDD: | will go about it in another way.

Q. Sir, isn’t one of the imporant functions of

* * *

[266] time? A. No, he didn’t indicate any problems with

repayment.

Q. Twenty weeks at $600 and how many weeks with regard

to the $5,000 would there have been? A. I believe the loan

must have occurred in 1969. In any case it was on Mifflin Street,

where the company was located on Mifflin Street, and in 1969

the company was located on Mifflin Street, so we are talking

about a loan in late 1969.

Q. What was the amount of the loan discussed in the

intercepted communication in the latter part of 1970? A. You

can’t identify the amount. You can only infer that he was

repaying a previous loan, possibly several — probably several.

38a

Appendix I

Q. Could it have been two, like $10,000 and $5,000? A. I

cannot tell.

Q. So in effect, it is not inconsistent, that intercepted

communication, with what Mr. Swinehart told you? A. I

would say in reviewing the contents of the previous transcript

that we referred to —

Q. Are you talking about the surreptitious recordings and

the conversations with the — with his attorney? [267] A. If we

look at the 10/27/76 transcript, | think he appears to be talking

— there is two separate borrowing incidents, one is when he

originally started the company. Then he describes another one

later on when he was over on Marlton Pike and he describes a

separate incident.

Q. It could have been the $5,000 borrowing? A. Not

according to the amounts in the transcript.

Q. You are talking about the transcript with Mr.

Kafrissen? A. Yes.

Q. Now, sir, based on what you have been able to

determine from your own investigation and your review of other

FBI files, what is it that Mr. Swinehart borrowed from Mr.

Sindone? A. | am not able to determine. It appears that there

are several.

Q. You are aware, sir, that Mr. Swinehart has immunity

with regard to all these statements; am | correct?

MR. GOLLATZ: Objection. | don’t believe that that is

necessarily the case. | think Mr. Kidd ought to reread that

agreement. Mr. Swinehart has an immunity which depends in

part upon his cooperation.

39a

Appendix I

[271] Government?

MR. GOLLATZ: None, your Honor.

THE COURT: Anything else for the record, gentlemen?

MR. KIDD: Your Honor, can we have one minute to

consult?

THE COURT: Would a short recess be appropriate?

MR. KIDD: It may be.

THE COURT: Let me ask you this. If the record is closed, I

assume we can then have argument. I would like to precisely

understand the Government’s position and | am trying to

determine the standards and criteria to decide the issues before

me, so that I will seek oral argument on that. Is there a

possibility we are almost at that point?

MR. KIDD: Yes, your Honor.

MR. GOLLATZ: The only thing, when you say the record

is closed, I assume that means all the documents we have we

would intend to offer in evidence, | through 15?

MR. KIDD: I assume that is what is meant. Does that also

include the polygraph report of Mr. Swinehart of the

independent

[286] relate those to the questions that Mr. Heilman testified

about this morning. For example, on the polygraph

examination, the second question is:

“Do you know for sure how AID was

originally capitalized?”

ss”

40a

Appendix |

His answer is:

“No ”

Now, Heilman’s testimony and a review of the other

transcripts indicates that Mr. Swinehart may have more

knowledge than what he says he does. For example, his

transcript shows that it was from loan sharks that Mr. Schwartz

got the capitalization. But then when he talks to the FBI, he

does not talk about loan sharks.

In his conversation with Mr. Kafrissen he talks about loan

sharks. When he talks to the FBI, he does not talk about loan

Sharks, he talks about a hocked ring or something else, not

anything that relates to loan sharking activities.

There was a question:

“Do you know for sure who referred you to

Sindone?”

[289] THE COURT: Well, what for example in the last one

caused the Government to believe that that was not full

cooperation, the $20,000 Frank Sindone statement?

MR. GOLLATZ: Well, your Honor, what we believe and |

believe the testimony of Agent Heilman has shown, is that Mr.

Swinehart has a more extensive relationship with Mr. Sindone

than he would subscribe to. When he first came in, he talked

about a $10,000 loan. Then, it went to a $10,000 plus $5,000,

another additional amount. Then, there are statements

throughout the whole transcript which indicate a relationship to

Mr. Sindone that the defendant would perhaps have more

information about that area.

4la

Appendix I

Now, we are talking about two things. We are talking about

deception on the polygraph, plus, coupled with other

information which tends to corroborate that the defendant may

be deliberately lying or he may be withholding information. In

the terms of his agreement, he is to provide full cooperation, by,

among other things, voluntary disclosure and unreserved

disclosure and that is what we [290] are talking about here.

THE COURT: All right.

MR. GOLLATZ: Like I said, there are other areas, but onc

of the things I think is important — that should be important

for the Court to understand is that then there was conversations

today or testimony today about Mr. Scheiber, as Agent Heilman

testified that Mr. Scheiber is now employed by Mr. Swinehart at

ARCO Leasing.

Mr. Swinehart’s original statements to people who would be

an uninterested witness, like Mr. Kafrissen, and then interested

witnesses like the Philadelphia district attorney’s office indicated

that Mr. Scheiver paid a more priminant [sic] role in AID

Leasing than he would have the FBI believe and that was the

purpose of that testimony. So now we are getting motivations

not only of pure deception regarding — not only are we getting

into an area where the polygraph is corroborated by these

particular questions and the particular testimony of Mr.

Heilman, but we are also getting into an area which shows the

defendant has a motivation for exculpating somebody other

* * *