Opposition Brief — Small v. United States

| Supreme Court, U.S,

4 BILLED

6g MAY 29 987

No. 86-1594

JOSEPH F. SPANIOL, JR,

roe.

In the Supreme Court of the United States

OCTOBER TERM, 1986

LEANDER MAX SMALL, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE ELEVENTH CIRCUIT

MEMORANDUM FOR THE UNITED STATES

IN OPPOSITION

CHARLES FRIED

Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 633-2217

TABLE OF AUTHORITIES

Cases:

Page

Autry v. Estelie, 706 F.2d 1394

(Sth Cir. 1983), cert. denied, 465 U.S.

EE wiki kp Anas eee k ks oR ke he eee ads 6

Government of Virgin Islands v. Smith,

ag ge § Ps ke err 5

Pillsbury Co. v. Conboy, 459 U.S. 248

LL pp rer re er Teer rer eer eee 4,5 -

United States v. Alessio, 528 F.2d 1079

(9th Cir.), cert. denied, 426 U.S. 948

ES Perr re p amen Perr ee eee ere 4

United States v. Bounos, 693 F.2d 38

Ge So i ee re eres eee ere 4

United States v. Caldwell, 543 F.2d 1333

(D.C. Cir. 1974), cert. denied, 423 U.S. 1087

Ls Ua tre sr pain ye ae er ee 4

United States v. Doe, 465 U.S. 605

| Se er rere sere mr 4,5

United States v. Gottesman, 724 F.2d 1517

ER SD. kn cs dbins ce mkasd ea bac nen's 4

United States v. Graham, 548 F.2d 1302

SN: SITE os Cine cesicecerpab ss ake ear 4

United States v. dunter, 672 F.24 815

SU SUED heb sw decd k eae anak nso ee xo 4

United States v. Karas, 624 F.2d 500

(4th Cir. 1980), cert. denied, 449 U.S. 1078

| RP er sere eer eee eee ee ee 4

II

Cases—Continued:

United States v. Lowell, 649 F.2d 950

(3d Cie, 1981) oi crcnvncanctivansasceene aes 5

United States v. Pennell>737 F.2d 521

(6th Cir. 1984), cert. denied, 469 U.S. 1158

(9985) coc cccuccccacanscaunps eaeewenessanues 4

United States v. Steele, 685 F.2d 793

(3d Cir.), cert. denied, 459 U.S. 908

(1982) .... .ccccsnsdesaeueeweeeete sane ewees 5

United States v. Turkish, 623 F.2d 769

(7th Cir. 1980), cert. denied, 449 U.S. 1077

4) Peeeerrer st PPP ere Py he eee 4

United States v. Whittington,

783 F.2d 1210, on reh’g, 786 F.2d 644 (Sth

Cir. 1986), cert. denied, No. 85-1974

(Oct. 6, 19GB) onc cies incendie ai wes enaeesees 4

Statute:

18 U.S.C. GOGMD) . ons sccasddunenewemeaseeeen 4

In the Supreme Court of the United States

OCTOBER TERM, 1986

No. 86-1594

LEANDER MAX SMALL, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE ELEVENTH CIRCUIT

MEMORANDUM FOR THE UNITED STATES

IN OPPOSITION

Petitioner contends that (1) the district court erred when

it refused his request to immunize a defense witness, and (2)

the evidence was insufficient to support his conviction.

1. Following a jury trial in the United States District

Court for the Southern District of Florida, petitioner was

convicted on 18 counts of mail fraud. He was sentenced to

concurrent terms of five years’ imprisonment, $17,000 in

fines, and five years’ probation. The court of appeals

affirmed by unpublished order. Pet. App. A.

In June 1982 petitioner and co-defendant W. Ed Herder

operated a mail solicitation business known as United

States Testing Authority (USTA).! Petitioner and Herder

'The statement of facts is taken from the government’s brief in the

court of appeals.

(1)

2

caused USTA to mail hundreds of thousands of solicita-

tions to the general public nationwide, offering a valuable

prize free of charge in exchange for returning a survey card

on television viewing habits and a $14.80 handling fee.

Contrary to the representation made in the literature sent to

the public, USTA had no client for its survey. Moreover,

the “prize” awarded to 9,999 of every 10,000 individuals

who responded to the solicitation was merely a membership

in a financially unsuccessful film processing club owned by

petitioner and Herder. One in 10,000 persons received one

of the prizes listed in the solicitation that had a minimal

value.

Concerned that no use was being made of the informa-

tion furnished by those who responded to USTA’s survey,

petitioner prevailed upon Herder to commission a survey of

the responses. The survey was not completed, in part

because petitioner and Herder stopped paying for the servi-

ces of the individual they had retained to analyze the

responses.

The scheme led to an investigation by the United States

Postal Service and an order issued by postal authorities

ceasing delivery of mail to USTA. As a consequence, in

September 1982 USTA closed its business. At the same time

petitioner and Herder established a successor to USTA,

which they called American Testing Institute (ATI). They

prevailed upon an employee, an elderly bookkeeper, to

agree to be listed as the president of ATI on corporate

documents. However, Herder and petitioner maintained

direct control over ATI’s daily operations. The business

format engaged in by ATI was identical to that of its prede-

cessor. Petitioner and Herder even continued to use the

same printer. They told the printer that if asked about

petitioner and Herder, he was to reply that they were merely

consultants to ATI and had no other connection with the

company.

3

In time, a number of the recipients of “awards” com-

plained to petitioner and Herder by mail and telephone.

Petitioner and Herder ridiculed the complaints and fre-

quently threw them away without responding to them. An

employee was told to hang up on people who called and

demanded refunds. By early 1983, the Postal Service had

stopped delivering mail to ATI.

Thereafter, government investigators examining the bank

accounts of USTA and ATI discovered that more than

225,000 checks in the amount of $14.80 each had been

deposited, for a total dollar amount in excess of $3,325,000.

Between July 1982 and March 1983, USTA and ATI dis-

bursed $1,715,000 to Herder and his mother. Another

$183,000 was paid to petitioner during that period.

2. At trial, petitioner asked the court to compel the

government to immunize or to grant judicial immunity to

Peter Gayle, whom the defense proposed to call as a defense

witness. Petitioner proffered to the court that Gayle would

reveal that he and Herder—and not petitioner—devised

and implemented the USTA scheme; that Gayle received

$556,000 from the scheme; and that Gayle authored the

letter and survey card that was mailed to the public by

USTA (10 R. 1202-1205). In response to a proffer by peti-

tioner’s co-defendant’s counsel, the government confirmed

that Gayle had appeared before the grand jury under an

agreement that barred the government from using his grand

jury testimony against him, but that the informal immunity

agreement did not extend to the trial (id. at 1213-1215).

Gayle was not summoned as a witness for the prosecution.

The court denied petitioner’s motion (10 R. 1216).

Moreover, the court examined Gayle’s grand jury testi-

mony in camera and advised petitioner that the testimony

was not exculpatory (ibid.).

4

3. Petitioner alleges that the government’s limited

immunization of Gayle constituted an abuse of process,

which the court was duty-bound to remedy by immunizing

the witness at trial. That argument is insubstantial. No

violation of petitioner’s due process rights resulted from the

informal immunity agreement between the government and

Gayle in the grand jury proceeding, and the district court

was not authorized to grant immunity to Gayle.

This Court never has recognized the existence of judicial

authority to immunize defense witnesses absent a request

from the government. The federal immunity statute (18

U.S.C. 6003(b)) vests the power to grant immunity in the

Executive Branch rather than the Judiciary. The Court

accordingly has explained that the authority to immunize

witnesses “is peculiarly an executive one, and only the

Attorney General or a designated officer of the Department

of Justice has authority to grant use immunity.” Pillsbury

Co. v. Conboy, 459 U.S. 248, 261 (1983). See id. at 253-254.

The corollary of this principle is that “[n]o court has author-

ity to immunize a witness” (id. at 261; see id. at 262). See

also United States v. Doe, 465 U.S. 605, 616-617 (1984).

Following these principles, the courts of appeals have

overwhelmingly ruled that judges may not immunize defense

witnesses without a request from the prosecution.”

’See, e.g., United States v. Whittington, 783 F.2d 1210, 1219-1220,

on rehearing, 786 F.2d 644 (Sth Cir. 1986), cert. denied, No. 85-1974

(Oct. 6, 1986); United States vy. Pennell, 737 F.2d 521, 526-528 (6th Cir.

1984), cert. denied, 469 U.S. 1158 (1985); United States v. Gottesman,

724 F.2d 1517, 1524 (11th Cir. 1984); United States v. Bounos, 693 F.2d

38, 39 (7th Cir. 1982); United States v. Hunter, 672 F.2d 815, 818 (10th

Cir. 1982); United States v. Karas, 624 F.2d 500, 505 (4th Cir. 1980),

cert. denied, 449 U.S. 1078 (1981); United States v. Turkish, 623 F.2d

769, 771-779 (2d Cir. 1980), cert. denied, 449 U.S. 1077 (1981); United

States v. Graham, 548 F.2d 1302, 1315 (8th Cir. 1977); United States v.

Caldwell, $43 F.2d 1333, 1356 n.115(D.C. Cir. 1974), cert. denied, 423

U.S. 1087 (1976); United States v. Alessio, 528 F.2d 1079, 1081-1082

(9th Cir.), cert. denied, 426 U.S. 948 (1976).

5

Prior to this Court’s decisions in Doe and Conboy, the

Third Circuit held that a district court may immunize a

defense witness when that witness has essential, exculpatory

information that is unavailable from other sources. See

Government of Virgin Islands v. Smith, 615 F.2d 964 (3d

Cir. 1980). Whatever the validity of the Third Circuit’s rule,

it is applicable by its terms only when the defendant makes

“a convincing showing” that the proffered testimony is

“both clearly exculpatory and essential to the defendant’s

case.” Jd. at 972. In addition, “{iJmmunity will be denied if

the proffered testimony is found to be * * * cumulative.”

Ibid. The Third Circuit thus has found a judicial grant of

immunity appropriate only when there is “a probable cer-

tainty that * * * [the] expected testimony would * * * in

itself exonerate [the defendant].” United States v. Lowell,

649 F.2d 950, 965 (1981) (emphasis in original). See also

United States v. Steele, 685 F.2d 793, 808, cert. denied, 459

U.S. 908 (1982).

Although the Third Circuit's approach to the issue is

different from that of other circuits, there is no need for the

Court to address that difference in this case. First, the Third

Circuit has yet to determine whether its recognition of

judicial immunity survives this Court’s remarks in Doe and

Conboy. In light of those intervening decisions, the Third

Circuit may reconsider its analysis of the issue of defense

witness immunity. Second, petitioner has not demonstrated

that he would have obtained a favorable ruling on his

request to immunize Gayle even in the Third Circuit. Peti-

tioner failed to show that Gayle would give unambiguous

testimony that clearly exculpated petitioner. Indeed, accord-

ing to the proffer, Gayle was not at all involved in ATI; he

ceased his association with Herder before USTA was dis-

placed by ATI. Even if, as petitioner proffered, Gayle

helped Herder originate the scheme, realized a substantial

profit from it, and authored the survey card and letter

6

mailed to the public, petitioner remained criminally liable

for his knowing and active participation in the fraudulent

activity that went far beyond the matters to which Gayle

might have testified. Moreover, the district court, which

examined Gayle’s grand jury testimony, specifically deter-

mined that it was not exculpatory (10 R. 1216). In sum, the

“(differences among the circuits are here a strawman

because [petitioner] fails all their tests.” Autry v. Estelle,

706 F.2d 1394, 1401 (Sth Cir. 1983), cert. denied, 465 U.S.

1085 (1984).

4. Petitioner claims (Pet. 34-35) that the evidence failed

to show that he devised the mail fraud scheme or manifested

an intent to defraud third parties. That fact-bound claim

does not warrant review by this Court. The government was

not required to demonstrate that petitioner helped create

the fraud. Its theory of prosecution was that petitioner

aided and abetted his co-defendant in executing the illicit

scheme (11 R. 1262-1263, 1317, 1323 (prosecution’s closing

argument)). The jury, properly instructed on aiding and

abetting (id. at 1334-1336), rejected petitioner’s contention

that he was an innocent, unaware company employee per-

forming largely ministerial chores for Herder. Among other

facts, petitioner’s receipt of more than $180,000 from the

scheme in a period of less than a year strongly supports the

government's position that petitioner was not just an inno-

cent employee of Herder’s. Because the evidence, examined

in the light most favorable to the government, adequately

supports the jury verdict, petitioner’s claim is unpersuasive.

It is therefore respectfully submitted that the petition for

a writ of certiorari should be denied.

CHARLES FRIED

Solicitor General

May 1987

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