Appendix — Deutsch v. New Mexico

85-1812

Supreme Court, U.S.

{nanan Coane oie aa

IN THE MAY 1 1986

Supreme Court of the Ani ) Stat esnior se

i CLERK

| ‘

October Term, 1985

FRANCIS THOMAS DEUTSCH,

Petitioner/Defendant,

V.

STATE OF NEW MEXICO,

Plaintiff/Respondent.

APPENDICES TO

PETITION FOR WRIT OF CERTIORARI TO THE

SUPREME COURT OF THE

STATE OF NEW MEXICO

JOHN J. KELLEHER

University of San Diego

School of Law

Alcala Park

San Diego, California 92110

(619) 483-3130, ext. 4380

Attorney for Petitioner

INTERIM PRINTING & MAILING COMPANY

1105 WEST MORENA BOULEVARD. SAN DIEGO. CALIFORNIA 92110 — 275-3050

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EDITOR'S NOTE

THE FOLLOWING PAGES WERE POOR

HARD COPY AT THE TIME OF FILMING.

IF AND WHEN A BETTER COPY CAN BE

OBTAINED, A NEW FICHE WILL BE

ISSUED.

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TABLE OF CONTENTS

APPENDIX A:

Writ of Certiorari denied - Feb. 5, 1986

- New Mexico Supreme Court ..................

APPENDIX B:

Appellate Opinion - Dec. 31, 1985

- New Mexico Court of Appeals.................

APPENDIX C:

Motion for Rehearing/Stay of Mandate..........

Motion denied - Mar. 5, 1986

- New Mexico Supreme Court ..................

APPENDIX D:

Plea & Disposition Agreement - Sept. 29, 1983 ....

APPENDIX E:

Notice of State’s intention to recommend alteration

fe a

Motion to enforce plea agreement -

SRP er eer a ere eee eee

Judgment, Sentence, Commitment -

ec dowed rs pek eh Eee Ch eae erie ace

Amended motion for reconsideration of sentence -

DO Cr eae eae Seal aa ciate won

District Court order: motion for reconsideration

of sentence denied; refusal to enforce plea

agreement appealable; bond set at $100,000 -

tS er er rere ere. ere

Motion for zeconsideration of sentence -

. & Seen are re rye rrr rr

Page

A-l

B-1

C-]

C-5

D-1

E-8

E-9

.

TABLE OF CONTENTS (Continued)

Page

APPENDIX F:

Motion for post-trial hearing on taint -

th: TE Ws kc danciacs Pererereree re F-1

Affidavit to accompany motion - Jan. 10, 1985.... F-2

Memorandum of Law to accompany motion -

( &, ~ pera see ei es F-7

District Court Order denying motion -

Se 8 ere rer errr rs F-15

APPENDIX G:

Motion to Preclude Grodner Testimony -

Ce, DU Fees 5 6 kv ox da be Vaneee cee en eee G-1

APPENDIX H: ;

Petition for Writ of Certiorari to New Mexico

a, nner reat ler | H-1

Certificate of Service - filed Jan. 20, 1986......... H-12

APPENDIX A

wrens

A-l

IN THE SUPREME COURT OF THE STATE OF NEW MEXICO

Wednesday, February 5, 1986

NO. 16,226

FRANCIS THOMAS DEUTSCH,

Petitioner,

vs.

STATE OF NEW MEXICO,

Respondent.

This matter coming on for consideration by the Court upon

petition for writ of certiorari, and the Court having considered

said petition and being sufficiently advised;

NOW, THEREFORE, IT IS ORDERED that petition for

writ of certiorari is hereby denied.

IT IS FURTHER ORDERED that the Record in Cause No.

8355 is hereby returned to the Clerk of the Court of Appeals.

ATTEST: A TRUE COPY

aw

Clerk of the Supreme Court

a the State of New Mexicc

APPENDIX B

B-1

IN THE COURT OF APPEALS OF THE

STATE OF NEW MEXICO

STATE OF NEW MEXICO,

Plaintiff-Appellee,

v. No. 8355

FRANCIS THOMAS DEUTSCH,

Defendant-Appellant.

FILED

"85 DEC 31

APPEAL FROM THE DISTRICT COURT OF

BERNALILLO COUNTY

Philip R. Ashby, Judge

John J. Kelleher

c/o Franchini, Henderson & Wagner

Gene Franchini

Franchini, Henderson & Wagner

Albuquerque, New Mexico

Attorneys for Defendant-Appellant

Paul G. Bardacke, Attorney General

Peter S. Kierst, Barbara F. Green,

Assistant Attorneys General

Santa Fe, New Mexico

Attorneys for Plaintiff-Appellee

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OPINION

WOOD, Judge.

This appeal involves convictions and sentences of Deutsch for

conspiracy, larceny, fraud, embezzlement and forgery in two

criminal cases--Bernalillo County District Court Cause Nos. 37206

and 37738. We (1) state the factual background; and discuss (2)

enforcement of a plea bargain; (3) the prosecutor’s allegedly late

disclosures; (4) interception of Deutsch’s personal mail; (5) testi-

mony from Deutsch’s attorneys; (6) testimony of a questioned

documents examiner; and (7) sufficiency of the evidence for the

forgery convictions.

FACTUAL BACKGROUND

Deutsch was the sole stockholder of E.F.D. Capital Group, Inc.,

a New York corporation (EFD). In the spring of 1983, EFD pur-

chased all the stock of two New Mexico corporations, Continental

Mortgage, Inc. (Continental), and Guaranteed Equities, Inc.

(Guaranteed). According to Deutsch, Continental and

Guaranteed were operated as a single mortgage brokering

business. According to Deutsch, ‘‘all three corporations were

treated as the sole proprietorship of Deutsch commencing in or

about May, 1983.’’

In the summer of 1983, the Financial Institutions Division of the

Regulation and Licensing Department (FID) investigated financial

activities involving Guaranteed. On August 19, 1983, FID brought

a civil suit in Santa Fe County District Court seeking various items

of relief. A temporary solution was negotiated. An order was

entered September 26, 1983, which, among other things, ap-

pointed Harold Douglass as trustee of Guaranteed.

On September 28, 1983, the indictment in Cause No. 37206 was

filed. The indictment named Deutsch and Continental as

Lane tanta et a ~

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defendants and charged both conspiracy to commit fraud and

fraud. Both Deutsch and Continental entered plea agreements.

Deutsch’s agreement, dated September 29, 1983, provided that no

additional criminal charges would be filed relating to any past

criminal activity involving Deutsch, Continental, Guaranteed,

EFD, or affected companies «1 connection with the conduct of

those businesses in New Mexico, their assets, liabilities and con-

tracts.

On February 14, 1984, the indictment in Cause No. 37738 was

filed. The indictment named Deutsch as a defendant and charged

various crimes in seventeen counts. All counts charged criminal

activity subsequent to the plea agreement of September 29, 1983.

Two of the charges were dismissed; Deutsch was convicted of

fifteen counts.

The transactions involved in the fifteen convictions in Cause

No. 37738 are:

(a) Eloy Romero loan. The loan was refinanced. An Omega

Funding Corporation (Omega) check in the amount of $31,240.44

was made payable to Guaranteed. This check was endorsed with

the name of Guaranteed and the initials ‘‘F.D.’’ On the basis of

this endorsement of Omega’s check, First Interstate Bank issued

its cashier’s check in the same amount, payable to Guaranteed.

The cashier’s check was endorsed in the name of Guaranteed, ‘‘F.

Deutsch, president’? and was cashed at a truck plaza in New

Jersey. Deutsch was convicted of larceny of the Omega check,

forgery on the basis of the endorsement of the Omega check, and

forgery on the basis of the endorsement of the cashier’s check.

These were counts Nos. 1, 2 and 3.

(b) Canaday loan. Attorneys Prelo and Grodner foreclosed this

loan on behalf of Guaranteed. At a foreclosure sale, Guaranteed

bought the property securing the loan. Canaday found a buyer to

redeem the property and Guaranteed agreed to sell to the buyer.

Prelo and Grodner handled the matter; they issued their trust

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account check, in the amount of $40,155.43, payable to

Guaranteed. Deutsch picked up the check from Prelo. The check

was endorsed in the name of Guaranteed, ‘‘Frank Deutsch, pres.’’

and was cashed at the truck plaza in New Jersey. Deutsch was

convicted of fraud and forgery. These were counts Nos. 4 and 5.

(c) Garcia and Rael loans. When Grodner (see (b) above) notic-

ed the endorsement on the trust account check, he questioned

Deutsch about it. Deutsch said he would straighten things out and

later gave Grodner three checks. Two of these three checks involv-

ed the Garcia and Rael loans. Omega issued its check for

$22,592.80, payable to Guaranteed, as a pay-off of the Garcia

loan. The Omega check was endorsed in the name of Guaranteed,

‘*F. Deutsch, Pres.’’ and exchanged for a New Mexico Federal

Savings & Loan Association (N.M. Federal) check in the same

amount. Deutsch delivered the N.M. Federal check to Grodner as

part of the pay-off of the Canaday loan. Deutsch was convicted of

embezzlement and forgery in connection with the Omega check.

These were counts Nos. 13 and 14. Tucumcari Federal Savings &

Loan Association issued its check in the amount of $13,956.68,

payable to Guaranteed, as a pay-off of the Rael loan. Deutsch

delivered this check to Grodner as part of the pay-off of the Cana-

day loan. Deutsch was convicted of larceny of this check. This

was count No. 15.

(d) Haws loan. A bank in California issued its check in the

amount of $22,749.73 to pay off this loan. The check was payable

to Guaranteed, ‘‘Haroid Douglass Trustee.’’ The check was en-

dorsed in the name of Guaranteed and in the name of the trustee,

‘*H. Douglass, Trustee,’’ and underneath the purported Douglass

signature, ‘‘F. Deutsch Pres.’’ The check was cashed at the truck

plaza in New Jersey. Deutsch was convicted of larceny and

forgery. These were counts Nos. 6 and 7.

(e) Torres loan. Torres had overpaid his loan and wanted reim-

bursement for the overpayment. The records of the trustee did not

show that the loan had been paid off. Territorial Abstract & Title

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Co., Inc. (Territorial) had handled the transaction. The trustee

checked with Territorial; it provided the documentation. The ex-

hibit, which is an attachment to another exhibit, is of poor quality

and is difficult to read. However, there was testimony that Ter-

ritorial had issued its check No. 6247 in the amount of $12,398.00

payable to Guaranteed. The check had been endorsed in the name

of Guaranteed, ‘‘F. Deutsch, Pres.’’ and was cashed at the truck

plaza in New Jersey. Deutsch was convicted of larceny and

forgery. These were counts Nos. 8 and 9.

(f) Radaelli loan. Omega issued its check in the amount of

$89,005.00 as a pay-off of this loan. The check was payable to

Guaranteed. The Omega check was endorsed in the name of

Guaranteed, ‘‘F. Deutsch, Pres.’’ and exchanged for a N.M.

Federal check payable to Guaranteed. The N.M. Federal check

was endorsed in the name of Guaranteed, ‘‘F. Deutsch, Pres.’’ and .

was cashed at the truck plaza in New Jersey. Deutsch was con-

victed of embezzlement and two counts of forgery. These were

counts Nos. 10, 11 and 12.

The foregoing outlines the transactions and the convictions in

Cause No. 37738. There is evidence that Deutsch lacked authority

to negotiate checks payable to Guaranteed during the time period

involved. There is evidence that Deutsch executed releases on

deeds of trust given in connection with some of the loans, but was

without authority to do so. There is testimony from Mr. Yudis,

who arranged the check cashing in New Jersey, about Deutsch’s

promise to ‘‘arrange’’ a vacation for Yudis so that he could avoid

testifying. Yudis was subpoenaed and testified under a grant of

immunity.

Deutsch does not challenge the sufficiency of the evidence for

his larceny, fraud and embezzlement convictions in Cause No.

37738.

B-6

ENFORCEMENT OF PLEA BARGAIN

The plea bargain agreement in Cause No. 37206 provided that

the sentence would be as provided by law but would not be impos-

ed until sixty days after the completion of an audit of Guaranteed

in connection with the civil case.

After the indictment in Cause No. 37738 was returned, Deutsch

moved for enforcement of an agreement between the Attorney

General, Deutsch and his attorney, which was executed contem-

poraneously with the plea bargain. This agreement provided that

if Deutsch complied with court order in the civil suit and if in-

vestors on some forty-five identified loans had been repaid, ‘‘the

State will recommend to the sentencing court that the defendant be

placed on probation.’’ An alternative to repayment of the in-

vestors was an approved repayment plan. We do not concern

ourselves with repayment or a plan for repayment because neither

matter if Deutsch did not comply with the order in the civil suit.

This is because ‘‘and’’ in the agreement is used in the conjunctive.

See Davis v. Savage, 50 N.M. 30, 168 P.2d 851 (1946).

Deutsch contends that at the hearing on Deutsch’s motion to en-

force the agreement, the evidence was uncontroverted that he com-

plied with the agreement except to the extent that the state’s in-

terference made compliance impossible. This argument ignores

the result of the hearing. The trial court stated that it would wait

to see what happened in Cause No. 37738 before deciding whether

Deutsch complied with the agreement.

After the convictions in Cause No. 37738, sentence was imposed

in Cause No. 37206. At the time of sentencing, the evidence show-

ed that Deutsch had nox complied with his agreement. In the civil

suit, the court appointed Douglass as trustee with totai control

over all receipts and disbursements of Guaranteed and ordered

Deutsch not to take any action interfering with or impeding the

trustee. The facts leading to the convictions for larceny, fraud and

embezzlement established noncompliance with the orders in the

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civil suit. Deutsch was not entitled to probation in Cause No.

37206, and the prison sentence in Cause No. 37206 was not con-

trary to the agreement.

ALLEGED LATE DISCLOSURE

BY THE PROSECUTOR

In Cause No. 37738, Deutsch contends the trial court erred in

denying his motion for a hearing or alternatively for dismissal of

the charges. The motion claimed late and incomplete discovery

which amounted to prosecutor misconduct.

On the morning that trial began, the prosecutor produced four

tapes. When one of Deutsch’s counsel, on the following day, went

to the Attorney General’s office in Albuquerque to review the four

tapes, ten more tapes were produced.

Deutsch’s counsel contended the prosecutor did not know how

many tapes there were. The prosecutor contended he had made

the tapes available but that no defense counsel listened to the tapes

in advance of trial and did not get around to listening to the tapes

until the trial was underway. The trial court refused to hear

evidence on the conflicting contentions. It is not disputed that

discovery of documents had been completed prior to trial, that this

discovery included offense reports, and these reports referred to

the tapes. Deutsch asserted that a hearing was necessary to show

the prosecutor was surprised at the number of tapes.

We need not decide whether the trial court erred in not conduct-

ing an evidentiary hearing and in not making a specific ruling on

whether there had been a discovery violation by the prosecutor.

When the issue of late discovery was raised, the trial court stated

it would rule later. At the end of the trial day, the trial court ex-

cused the jury for the next day (Friday), thus giving the defense a

three-day weekend to listen to the tapes and do other preparation

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as deemed necessary. On the following Monday, the triai court

asked the defense how Deutsch had been prejudiced. The defense

replied that it had already cross-examined Douglass and would

have cross-examined him on the basis of the contents of the tapes.

The trial court ordered that Douglass return to the witness stand,

and the defense cross-examined him extensively.

Remedies for violation of discovery rules or orders are discre-

tionary with the trial court. State v. Johnson, 91 N.M. 148, 571

P.2d 415 (Ct.App.1977). If there is a violation, Deutsch is not en-

titled to relief unless he has been prejudiced by the violation. State

v. Perrin, 93 N.M. 73, 596 P.2d 516 (1979); State v. Manus, 93

N.M. 95, 597 P.2d 280 (1979).

Assuming, but not deciding, that there was a discovery viola-

tion, the trial court provided a remedy for the claimed prejudice;

the cross-examination took place. See State v. Pedroncelli, 97

N.M. 190, 637 P.2d 1245 (Ct.App.1981). There being no other

claim of prejudice, the trial court did not err in its disposition of

Deutsch’s discovery claim.

INTERCEPTION OF PERSONAL MAIL

An issue at the trial of Cause No. 37738 was whether Douglass,

the court-appointed trustee, had intercepted or caused to be inter-

cepted, the personal mail of Deutsch.

There is evidence that Douglass discovered that checks intended

for Guaranteed were being intercepted and cashed with an en-

dorsement purporting to be that of Deutsch. Douglass instituted

tighter control over the mail. Douglass admitted that he ordered

all mail addressed to Guaranteed be opened even if Deutsch was

also an addressee. Douglass denied, but other witnesses affirmed,

that Douglass ordered the interception of all mail, including mail

addressed only to Deutsch.

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Deutsch asked for a hearing on tainted evidence. Because there

was no such hearing in the trial court, Deutsch contends that all

convictions in Cause No. 37738 must be reversed. Deutsch states:

‘*‘Having made a prima facie showing that Douglass made an il-

legal search of his personal mail, Appellant was entitled to an

evidentiary hearing at which the burden of proof should have been

placed on the State to prove that their case was untainted.’’

Deutsch relies on Nardone v. United States, 308 U.S. 338, 84

L.Ed. 307, 60 S.Ct. 266 (1939). We agree that Nardone is controll-

ing authority; however, Deutsch misreads that decision. Deutsch

contends that only two steps are involved in deciding the question

of evidentiary taint; that once there was evidence of taint then the

prosecutor must prove the absence of taint. This is incorrect.

Once there was evidence of taint (the first step), then defendant

had the opportunity to prove that a substantial portion of the case

against a defendant was a fruit of the taint (the second step). Only

after a defendant has satisfied the second step does the burden

shift to the prosecutor. Nardone states:

The burden is, of course, on the accused in the first

instance to prove to the trial court’s satisfaction

that . . . [Deutsch’s mail was unlawfully inter-

cepted]. Once that is established . . . the trial judge

must give opportunity, however closely confined,

to the accused to prove that a substantial portion

of the case against him was a fruit of the poisonous

tree. This leaves ample opportunity to the Govern-

ment to convince the trial court that its proof had

an independent origin.

. . . [C]laims that taint attaches to any portion of

the Government’s case must satisfy the trial court

with their solidity... .

The trial court assumed, but did not decide, that step one was

satisfied, that there was proof of unlawful action. The trial court

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inquired as to step two. Deutsch responded that the opening of his

personal mail led to knowledge by the state concerning personal

affairs such as travel, other business dealings and other lawsuits.

Deutsch could not state, and made no tender, that knowledge of

his personal affairs had anything to do with the trial. Rather,

Deutsch contended that he could not know whether any portion of

the case against him was tainted without a hearing, and that the

entire investigation was tainted. However, Deutsch did not

disagree when the prosecutor responded that the most important

part of the case was the checks; Deutsch never claimed that the

checks were tainted evidence.

Deutsch did not satisfy his burden as to step two; the burden

never shifted to the prosecution to prove that its case against

Deutsch was based on untainted evidence. The trial court did not

err in failing to conduct the requested hearing, there being an in-

sufficient showing of taint to invoke a further hearing.

TESTI“ ONY FROM DEFENDANT’S ATTORNEYS

Deutsch contends the indictment in Cause No. 37738 should

have been dismissed because of the use of testimony by Deutsch’s

attorneys. This issue involves two sets of attorneys: (a) Prelo and

Grodner, and (b) King.

(a) Prelo and Grodner

These attorneys testified to events in connection with the

Canaday loan, a matter that they handled on behalf of

Guaranteed. Deutsch does not attempt to demonstrate that they

were his attorneys, so that an attorney-client relationship might

exist. Deutsch assumes they were his attorneys. We made the

same assumption because the trial court’s ruling was not on the

basis of the existence of an attorney-client relationship. However,

Se en one ne

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because of the trusteeship, see Commodity Futures Trading Com-

mission v. Weintraub, __ U.S. __, 85 L.Ed.2d 372, 105 S.Ct. 1986

(1985).

Deutsch complains of the testimony of these attorneys before

both the grand jury and the trial jury. It is not necessary to con-

sider the different functions of the two juries in order to decide

this issue. However, see Buzbee v. Donnelly, 96 N.M. 692, 634

P.2d 1244 (1981).

Assuming there was an attorney-client relationship, there was

no attorney-client privilege. NMSA 1978, Evid. Rule 503(d)(1)

(Repl. Pamp. 1983) states there is no privilege under this rule, ‘‘{i]f

the services of the lawyer were sought or obtained to enable or aid

anyone to commit or plan to commit what the client knew or

reasonably should have known to be a crime or fraud[.]’’ Deutsch

was convicted of fraud in connection with the attorneys’ trust ac-

count check, and convicted of embezzlement and larceny on the

basis of his efforts to cover up the fraud. The attorney services in-

volved were obtained to enable Deutsch to commit the crimes.

Deutsch does not seriously contend that an attorney-client

privilege existed. Rather, he contends the attorneys breached an

ethical obligation to him by testifying. Deutsch relies on the

American Bar Association Model Code of Professional Respon-

sibility. Canon 4 of that Code is similar to New Mexico’s Code of

Professional Responsibility, NMSA 1978, Code of Prof.Resp.

Rule 4-101(B) (Repl.1985), which states, as a general proposition,

that a lawyer shall not knowingly reveal a confidence or secret of

his client. Deutsch also relies on the discussion of ethical con-

siderations in the American Bar Association Code. That discus-

sion is to the effect that the ethical consideration is more extensive

than the privilege. In sum, Deutsch’s argument is that the ethical

consideration of not revealing a client’s secrets barred the

testimony of the attorneys even though no attorney-client privilege

applied to their testimony.

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Assuming, but not deciding, that ethical considerations might

bar the testimony of the attorneys under the facts of this case,

what follows from a violation? Deutsch contends the violation

denied him due process of law and the effective assistance of

counsel contrary to both the federal and state constitutions. The

trial court invited authority in support of this claim; none was sup-

plied. The contention is renewed in this court, again without cita-

tion of authority.

An issue raised on appeal will not be reviewed if the issue is not

supported by cited authority. In this situation, we assume an

absence of supporting authority. Jn Re Adoption of Doe, 100

N.M. 764, 676 P.2d 1329 (1984); see State v. Callaway, 92 N.M.

80, 582 P.2d 1293 (1978). Further, Deutsch, as appellant, had the

burden of demonstrating prejudicial error. See State v. Pruett,

100 N.M. 686, 675 P.2d 418 (1984). Quite apart from the absence

of supporting authority, Deutsch makes no effort to demonstrate

that the testimony of an attorney handling a civil matter deprived

him of due process in this criminal case or deprived him of effec-

tive assistance of counsel in this criminal case.

(b) King

Attorney David W. King, on behalf of Deutsch, wrote a letter to

the trial judge in the civil suit, stating that some $200,000.00 in

checks payable to Guaranteed had been sent to New York and

there endorsed by Deutsch’s employees. The letter specifically

refers to the Torres loan, one of the transactions involved in Cause

No. 37738. According to the letter, this was all a big mistake.

Deutsch asserts the trial court erred in permitting King to testify

that he wrote the letter and to authenticate his tape-recorded con-

versation with Deutsch, which was the basis for the letter. Deutsch

argues that the tape and the letter were ‘‘sensitive and confiden-

tial’’ communications not within the crime exception to the

attorney-client privilege. See Evid.R. 503(d)(1). This argument is

irrelevant. The trial court admitted the testimony and the tape on

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the basis that there was no confidential communication because

the communication was intended to be disclosed to third persons,

see Evid. Rule 503(a)(4), and, therefore, the communication was

not privileged, see Evid. Rule 503(b). The trial court’s ruling was

correct. The letter was addressed to the trial judge in the civil suit,

with copies to other persons. The tape was made for the purpose

of preparing the letter.

Deutsch also contends the admission of the letter and tape was

error because the prosecutor, in closing argument, wove ‘‘sinister

arguments’’ around them. We assume the claim alleges prosecutor

misconduct. There was no misconduct. The contents of the letter

could be considered as a self-serving exculpatory statement. If, as

Deutsch contends (there are no transcript references and we have

not looked up the arguments), the prosecutor characterized the let-

ter as “‘a tissue of lies designed to dupe the attorney into helping

[Deutsch] cover his criminal tracks,’’ such was not misconduct but

a permissible view of the evidence. See State v. Venegas, 96 N.M.

61, 628 P.2d 306 (1981).

TESTIMONY OF A QUESTIONED

DOCUMENTS EXAMINER

This issue goes to the endorsements on the checks in Cause No.

37738. A questioned documents examiner, stipulated to be an ex-

pert witness, testified that two of the endorsements were ‘‘pro-

bably’’ signed by Deutsch, that three may have been signed by

Deutsch, and that she could not make any identification of two

endorsements. (This does not add up to the eight endorsements in-

volved, but this is all the parties discuss.)

The examiner attributed her lack of certainty to the poor quality

of the exemplars provided for purposes of comparison. Deutsch

provided exemplars in October 1984, but they were insufficient for

purposes of comparison. Deutsch provided additional exemplars

in November 1984. The examiner testified the November

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exemplars were worthless because they were an attempt by

Deutsch to disguise his natural handwriting.

Deutsch contends the examiner’s testimony concerning the

November exemplars was improperly admitted, for two reasons.

(a) Qualifications of the Examiner

Deutsch asserts that the testimony about disguised exemplars

was beyond the expertise of the examiner. He asserts the

examiner’s expertise was limited to handwriting comparison and

no comparison was involved in connection with the November

exemplars.

Before admitting the examiner’s opinion as to the November

exemplars, the trial court held a hearing where evidence was

tendered. At the tender hearing, the examiner (1) described the

exemplars as written with lack of skill and with obvious distortions

so that the exemplars were not identifiable as having been written

by the person who wrote the October exemplars; (2) explained the

basis for her description, iticluding the fantastic forms and distor-

tions in the November exemplars; and (3) testified that attempts to

disguise handwriting was within the scope of her expertise. The

examiner testified that in her work she had encountered attempts

to disguise many times and it was something she looked for. She

agreed that if she could not recognize such attempts she would not

be much of an expert. Her opinion, on the basis of her training

and sixteen years of experience, was that the November exemplars

were an attempt to disguise. On cross-examination she explained

that her opinion was not based on any subjective mental state of

Deutsch, but on the physical evidence (the exemplars).

The trial court did not abuse its discretion in admitting the

examiner’s opinion as expert testimony. Séate v. Gilbert, 100

N.M. 392, 671 P.2d 640 (1983); see In Re Estate of Foster, 102

N.M. 707, 699 P.2d 638 (Ct.App.1985).

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{b) Character Testimony

NMSA 1978, Evid. Rule 404(a) (Repl.Pamp.1983) provides

generally that evidence of a person’s character is not admissible for

the purpose of proving that he acted in conformity therewith.

Evidence Rule 404(b) provides that evidence of other wrongs or

acts is not admissible to prove the character of a person in order to

show that he acted in conformity therewith.

Deutsch claims that the examiner’s opinion that he attempted to

disguise his handwriting in the November exemplars was inad-

missible character evidence. We disagree.

Deutsch’s attempt to disguise his handwriting in the November

exemplars, at a time he was charged with multiple forgeries, was

relevant evidence showing a consciousness of guilt. State v.

Vallejos, 98 N.M. 798, 653 P.2d 174 (Ct.App.1982), and cases

therein cited. Testimony as to the attempt to disguise was not ad-

mitted to prove that Deutsch acted in conformity to his character

and was not inadmissible character evidence.

SUFFICIENCY OF THE EVIDENCE

FOR THE FORGERY CONVICTIONS

There are eight forgery convictions. Deutsch attacks the suffi-

ciency of the evidence as to each conviction. The attack has two

parts.

(a) Deutsch asserts the evidence is insufficient to show that he

endorsed the several checks or caused others to endorse the checks

with his name. We disagree. The totality of the evidence and the

legitimate inferences therefrom, including the testimony of the

examiner, of Yudis, Deutsch’s admission of a ‘‘mistake’’ and the

circumstances in the handling and cashing of the checks, is sub-

stantial evidence that Deutsch either endorsed the checks or caused

others to endorse his name.

B-16

(b) Deutsch asseris that even if he did endorse the checks, he

signed only his own name. For all but one of the forgeries, we

agree.

The jury was instructed, for each forgery charge, that there

must have been a false endorsement. NMSA 1978, Section

30-16-10(A) applies to this case and defines ‘‘forgery’’ as ‘‘falsely

making... any signoture....’’ Deutsch signed his own name.

However, in count No. 7 (see the Haws loan transaction), a payee

was ‘‘Harold Douglass Trustee.’’ The endorsement of the name

‘*Harold Douglass Trustee’ was false. Deutsch’s conviction of

forgery in count No. 7 is affirmed. The signing of his own name

on the other checks was not forgery, because it was not a false

signature. State v. Bibbins, 66 N.M. 363, 348 P.2d 484 (1960).

The evidence that Deutsch’s endorsement of the checks was

without authorization is substantial. The validity of the forgery

convictions, other than count No. 7, depends on whether

Deutsch’s signing of his own name, without authorization,

amounts to forgery. Section 30-16-10(A) does not define forgery

in terms of lack of authorization. Compare the wording of the

statute involved in People v. Young, 19 Ill.App.3d 455, 311

N.E.2d 609 (1974).

The state asserts that a genuine signature, without authoriza-

tion, is forgery in New Mexico. It cites State v. Lopez, 81 N.M.

107, 464 P.2d 23 (Ct. App. 1969), but that case does not suppor the

state. Lopez involved the signing of the name of the payee, false-

ly, when Lopez was not the payee.

The State asserts that a genuine signature, without authoriza-

tion, should be forgery in New Mexico. It cites People v. Susalla,

392 Mich. 387, 220 N.W.2d 405 (1974). Susalla does support the

state; the court interpreted the Michigan forgery statute to include

a genuine signature without authorization. In so holding, the

Michigan court rejected the common law view that forgery did not

include misrepresentation of agency. See Gilbert v. United States,

B-17

370 U.S. 650, 8 L.Ed.2d 750, 82 S.Ct. 1399 (1962). The power to

define crimes is a legislative function in New Mexico. State v.

Allen, 77 N.M. 433, 423 P.2d 867 (1967). This court lacks author-

ity to trespass on the legislative power by adding a ‘‘without

authorization’”’ provision to the siatutory definition of forgery.

N.M. Const. art. III, § 1.

The state also cites two Texas cases. In Moore v. State, 666

S.W.2d 632 (Tex.App. Ist Dist.1984), the defendant signed his

own name but pretended to be another person with the same

name. This was forgery under the applicable Texas statute, which

defined forgery to include the execution of a writing which pur-

ported to be the act of another who did not authorize the act. Sa/es

v. State, 628 S.W.2d 796 (Tex.Cr.App.1982), involved the same

statutory definition in Texas. The New Mexico statute does not

_ contain such a definition.

R. Perkins & R. Boyce, Criminal Law, Chapter 4, Section 8 at

418 (3d ed.1982), points out that for forgery at common law, it is

not sufficient for the writing to tell a lie, the writing itself must be a

lie. -

Where an agent, who has a general power to sign for his prin-

cipal, indorses his principal’s name on a negotiable instrument in

fraudulent abuse of his power, this is not forgery because the in-

dorsement is fully effective. An additional point is to be noted in

cases in which one fraudulently purports to act as agent for

another. If he has no power or authority to act in this capacity,

the other will not be bound; but if the signature contains both

names and shows that the signer was purporting to act as agent for

the other, the writing is not 2 forgery.

R. Perkins & R. Boyce, supra, at 420 (footnotes omitted). See 4

Wharton’s Criminal Law, § 497 (C. Torcia 14th ed.1981). As

Gilbert v. United States points out, at common law, the endorsing

of a bill of exchange under a false assumption of authority to en-

dorse is not forgery because there is no false making.

B-18

In seven of the eight forgery convictions, Deutsch endorsed or

caused his name to be endorsed to the check. This was not a false

endorsement, only an endorsement without authorization. This

was not forgery as defined in Section 30-16-10(A).

We reach this result without assistance from Deutsch, who cited

no authority in support of the result reached. However, we cannot

affirm on the basis of Jn Re Adoption of Doe because due process

of law requires that there be sufficient evidence to justify a rational

trier of fact to find guilt beyond a reasonable doubt. Sia/e v.

Sheets, 96 N.M. 75, 628 P.2d 320 (Ct.App.1981). Seven of the

eight forgery convictions must be reversed because the evidence of

endorsement without authorization was insufficient to justify a ra-

tional trier of fact to find guilt. This is not a criticism of the jury.

It asked: ‘‘Would the endorsement of a monetary instrument,

signed with the true name of the endorser, but in direct contradic-

tion to a court order forbidding the negotiation by said party, con-

stitute forgery?’’ The question was not answered in the trial court.

The answer, however, under Section 30-16-10(A), is ‘‘No.’’

The sentence in Cause No. 37206 is affirmed. The convictions

and sentences in Cause No. 37738 for larceny, fraud and embezzle-

ment are affirmed. The conviction and sentence for forgery, iden-

tified in count No. 7 of Cause No. 37738, are affirmed. The

remaining seven forgery convictions are reversed.

is A |

E W. WOOD, Judge

IT IS SC ORDERED.

WE CONCUR:

D » Judge

PAMELA B. MINZNER, Judge”

APPENDIX C

xt

se

Ridin Mee!

Ea

C-1

IN THE SUPREME COURT

OF THE STATE OF NEW MEXICO

FRANCIS THOMAS DEUTSCH,

Petitioner/Defendant,

Vv.

STATE OF NEW MEXICO,

No. 16226

Respondent/Plaintiff.

MOTION FOR REHEARING

OR

IN THE ALTERNATIVE

TO

STAY MANDATE

Submitted by:

Attorneys for Plaintiff/Appellees:

JOHN J. KELLEHER

c/o Franchini, Henderson

Wagner, & OLiver

(619) 260-4600 xt. 4380

GENE FRANCHINI

Franchini, Henderson,

Wagner, & Oliver

P.O. Box 1487

Albuquerque, NM 87103

(505) 242-6300

PAUL BARDACKE

Attorney General

Peter F. Kierst

Barbara F. Green

Asst. Attorneys General

P.O. Drawer 1508

Sante Fe. NM 87504

(505) 827-6081

C-2

IN THE SUPREME COURT

OF THE STATE OF NEW MEXICO

FRANCIS THOMAS DEUTSCH,

Petitioner/Defendant,

v. No. 16226

STATE OF NEW MEXICO,

Respondent/ Plaintiff.

Comes now the Petitioner, FRANCIS THOMAS DEUTSCH,

by and through his attorneys, John J. Kelleher and Gene Fran-

chini, and moves this court for an order as follows:

I. Granting Petitioner a rehearing, including oral argument, on

his Petition for Certiorari filed with this court on January 20,

1936, or, in the alternative,

II. Staying the issuance of the Mandate of this Court and all

proceedings in the courts below pending the filing of a Petition for

Certiorari to the United States Supreme Court.

The basis for the motion for rehearing is as follows:

1. Petitioner is advised and believe that this Court has denied

his Petition for Certiorari and is about to issue its Mandate to the

courts below. Petitioner has never received a hearing, evidentiary

or otherwise on several critical issues of fact and law raised in a

timely fashion in this Court and in the courts below.

2. The issues raised concern violation by the Respondent of

Petitioner’s rights under the constitutions of the State of New

Mexico and of the United States of America.

C-3

3. Petitioner’s motions for redress from Respondent’s miscon-

duct were brought in good faith and raise not only matters of pro-

cedure, but go to the ultimate integrity of the finding of guilt in the

trial below.

4. Petitioner maintains that he is innocent of the crimes of

which he stands convicted and that there has been a substantial

miscarriage of justice in his case.

5. Unless this Court grants Petitioner Writ of Certiorari, he will

have no alternative but to engage in further litigation, the costs of

which have already become nearly intolerable.

The basis for Petitioner’s motion for a Stay of Mandate and of

all proceedings in the courts below is as follows:

1. Under Rule 22 of the Rules of Practice before the United

States Supreme Court, Petitioner has but sixty (60) days in which

to seek review by writ of Certiorari.

2. Under Rule 27 of the Rules of Practice before the United

States Supreme Court, this Court enjoys coextensive power with

the United States Supreme Court to stay proceedings pending a

petition for Certiorari to the United States Supreme Court.

3. Petitioner will, if his Petition for Rehearing is denied, bring a

Petition for Certiorari before the United States Supreme Court.

4. Petitioner is financially distressed and his assistance in help-

ing counsel prepare his Petition for Certiorari will enable Peti-

tioner to avoid having to proceed in forma pauperis, thus becom-

ing a financial burden to the public.

5. Petitioner stands convicted of no crime involving violence or

other threat to the public peace or security, nor has he ever failed

to appear or otherwise given any reason to consider Petitioner a

flight risk. Petitioner’s liberty greatly reduces the logistic demands

C-4

upon his counsel in preparing the many documents and pleadings

necessary to vindicate his rights and secure his ultimate acquittal of

all charges.

6. These motions are brought in good faith and not for the pur-

pose of delaying or impeding the justice of this or any other Court.

WHEREFORE, Petitioner prays that this Court grant his mo-

tion for a rehearing, or, in the alternative, Stays all proceedings

pending his Petition for Certiorari to the United States Supreme

Court.

Gene Franchini

P.O. Box 1487

Albuquerque, NM 87103

Attorneys for Petitioner

February 14, 1986

C-5

IN THE SUPREME COURT OF THE STATE OF NEW MEXICO

Wednesday, March 5, 1986

NO. 16,226

FRANCIS THOMAS DEUTSCH,

Petitioner,

VS.

STATE OF NEW MEXICO,

Respondent.

This matter coming on for consideration by the Court upon

Motion of Petitioner for Rehearing or in the Alternative, to Stay

the Mandate, and the Court having considered said motion and

being sufficiently advised;

NOW, THEREFORE, IT IS ORDERED that the Motion

of Petitioner for rehearing is hereby denied. |

IT IS FURTHER ORDERED taat the Motion of Petitioner

to Stay the Mandate is hereby referred to the Court of Appeals for

disposition.

ATTEST: A TRUE COPY

Ra Dusniclatdesle

Cierk of the Supreme Couri

ot ihe State of New Mexicc

ss

ou

e

-

e

ime

APPENDIX D

D-1!

STATE OF NEW MEXICO COUNTY OF BERNALILLO

IN THE DISTRICT COURT

FILED IN MY OFFICE THIS

STATE OF NEW MEXICO a

fal SEP 29 '83 PM

FRANK DEUTSCH ROSELLA A. BUDRIS

Defendant

PLEA AND DISPOSITION AGREEMENT

The State of New Mexico and the defendant hereby agree

to the following disposition of this case:

Plea: The defendant agrees to plead (guilty) to the following of-

fenses:

Criminal conspiracy to commit fraud in excess of $20,000,

a third degree felony.

Terms: On the following understandings, terms and conditions:

1. That no more severe than the following disposition will

be made of the charges: As provided by law; however, im-

position of sentence is to be continued until 60 days after

the completion of an audit of Guaranteed Equities, Inc., in

conjunction with civil proceedings pending before Judge

Lorenzo Garcia, in Santa Fe, No. 83-1651(C).

2. That the following charges will be dismissed, or if not

yet filed, shall not be brought against the defendant: No

additional criminal charges relating to any past criminal

activity involving defendant, Continental Mortgage Ex-

change, Inc., Guaranteed Equities, Inc., or EFD Capital

Group, Inc., or affiliated companies in the conduct of

D-2

those businesses in New Mexico, tkeir assets, their

liabilities and contracts.

3. That this agreement, unless rejected or withdrawn,

serves to amend the complaint, indictment, or information

to charge the offense to which the defendant pleads,

without the filing of any additional pleading. If the plea is

rejected or withdrawn, the original charges are

automatically reinstated.

4. Unless this plea is rejected or withdrawn, that the defen-

dant hereby gives up any and all motions, defenses, objec-

tions or requests which he has made or raised, or could

assert hereafter, to be the court’s entry of judgment

against him and imposition of a sentence upon him consist-

ent with this agreement.

5. That, if after reviewing this agreement and any pre-

sentence report the court concludes that any of its provi-

sions are unacceptable, the court will allow the withdrawal

of the plea, and this agreement shall be null and void. If

the plea is withdrawn, neither the plea nor any statements

arising out of the plea proceedings shall be admissible as

evidence against the defendant in any criminal pro-

ceedings.

I have read and understand the above. I have discussed the case

and my constitutional rights with my lawyer. i understand that by

pleading (guilty) (no contest) I will be giving up my right to a trial

by jury, to confront, cross-examine, and compel the attendance of

witnesses, and my privilege against self-incrimination. I agree to

enter my plea as indicated above on the terms and conditions set

forth herein. I fully understand that if, as part of this agreement, I

am granted probation, a suspended sentence or a deferred sentence

D-3

by the court, the terms and conditions thereof are subject to

modification in the event that I violate any of the terms or condi-

tions imposed.

DATE DEFENDANT

I have discussed this case with my client in detail and advised

him of his constitutional rights and all possible defenses. I believe

that the plea and disposition set forth herein are appropriate under

the facts of this case. I concur in the entry of the plea as indicated

above and on the terms and conditions set forth herein.

DATE DEFENSE COUNSEL

I have reviewed this matter and concur that the plea and disposi-

tion set forth herein are appropriate and are in the interests of

justice.

seekeen vee | SILER eee | RMN

DATE PROSECUTOR

Approved:

eee SEE

MAGISTRATE OR DISTRICT JUDGE

APPENDIX E

E-1

SECOND JUDICIAL DISTRICT COURT

COUNTY OF BERNALILLO FILED win Ges _

STATE OF NEW MEXICO |

JUN < ~ :9te

STATE OF NEW MEXICO, on 6. FF

Plaintiff, ee

vs. NO. 37206

FRANK DEUTSCH,

Defendant.

NOTICE OF STATE’S INTENTION TO RECOMMEND

ALTERATION OF BASIC SENTENCE BY REASON OF

AGGRAVATING CIRCUMSTANCES.

COMES NOW the State of New Mexico and hereby notifies the

Court and the defendant that it intends to recommend alteration

of the defendant’s basic sentence by reason of aggravating circum-

stances. Pursuant to Section 31-18-15.1, NMSA 1978 as amended,

the State will submit evidence to the Court at the sentencing hear-

ing in support of its contention that the basic sentence for the third

degree felony to which the defendant has pleaded guilty should be

increased by one-third.

Respectfuily submitted,

PAUL BARDACKE

Attorney General

el leo

Assistant ia General

Z, Le YY f- 4

se ~

RED CHR ?

Assistant Attorney General

P.O. Drawer 1508

Santa Fe, New Mexico 87504

505 827-6000

E-2

SECOND JUDICIAL DISTRICT

COUNTY OF BERNALILLO ENDORSED

STATE OF NEW MEXICO FILED {N MY OFFICE THIS

No. CR 37206 AUG2 7 1994 _

STATE OF NEW MEXICO, Klecth, Buoy

Plaintiff, CLERK DISTRICT COL«T

vs.

FRANCIS (FRANK) THOMAS

DEUTSCH, et al.,

Defendants.

MOTION TO ENFORCE PLEA AGREEMENT

The Defendant respectfully requests that the Court enforce the

plea agreement entered into between the parties attached hereto as

Exhibit A.

As grounds for this motion, counsel for the Defendant states:

1. On September 29, 1983, the parties entered into a plea agree-

ment memorialized by the memorandum attached hereto as Ex-

hibit A.

2. The Defendant has fully complied and performed his obliga-

tions under the plea agreement or to the extent that the Defendant

was unable to perform any part of the agreement it was due to the

efforts of the State.

WHEREFORE, the Defendant having fully performed the plea

agreement herein, respectfully requests that the Court order the

State of New Mexico to comply with its provisions.

THIS MOTION IS SET

FOR HEARING ON

Bere AT E2QeM.

; sep Alera

E-3

Respectfully submitted,

CHRIS KEY

Attorney for Defendant

211 Twelfth Street N. W.

Albuquerque, New Mexico 87102

(505) 242-9097

I hereby certify that a true

and correct copy of the fore-

going was mailed to opposing

counsel of record this ____

day of August, 1984.

Chris Key

E-4

SECOND JUDICIAL DISTRICT nese Ne 8 GREE Tagg

COUNTY OF BERNALILLO JAN 3 5 1995

STATE OF NEW MEXICO ate yoy

STATE OF NEW MEXICO, he

Plaintiff,

vs. No. CR 37206

FRANCIS (FRANK) THOMAS

DEUTSCH,

Defendant.

JUDGMENT, SENTENCE AND COMMITMENT

THIS MATTER having come before the Court on January 30,

1985. State being represented by Attorney General Paul Bardacke

and by Assistant Attorney General John G. McKenzie, and the

Defendant appearing personally and by his attorneys, Gene Fran-

chini‘and John Kelleher. The Defendant having plead guilty to

one County of conspiracy to commit fraud in excess of $20,000,

contrary to Sections 30-16-6 and 30-20-2, NMSA 1978, as amend-

ed, a third degree felony on September 29, 1983, pursuant to a

Criminal Information filed on September 28, !983, and a hearing

having been conducted on sentencing on October 30, 1984, tlic

Defendant having been present both personally and by his at-

torneys, Gene Franchini and Manny Aragon, and a Judgment of

Guilty having been signed by this Court and filed.

The Defendant is hereby ADJUDGED GUILTY AND CON-

VICTED of the crime of conspiracy to commit fraud in excess of

$20,000 and is sentenced to be imprisoned by the New Mexico

Department of Corrections for a term of three (3) years, following

which time the Defendant shall serve a two (2) year mandatory

Statutory parole period.

E-5

This sentence shall be served and shall run consecutively and not

concurrently to the term of imprisonment imposed upon the

Defendant in Bernalillo County District Court Cause No. CR

37738.

THEREFORE, the Defendant is remanded to the custody of the

New Mexico Department of Corrections to serve the term of im-

prisonment of three (3) years as stated herein. The Defendant

shall be entitled to 12 days of pretrial confinement.

RIL . ASHBY

District Judge

Approved as to form:

NG, be Ya——

JOHN Gy RCKENZI

Assistant Attorney General

1 N

Attorney for the Defendant

ine FLED UR We GE7ICE THIS

SECOND JUDICIAL DISTRICT COURT FEB O 11985

COUNTY OF BERNALILLO ts

STATE OF NEW MEXICO Eun S.

No. CR-37206 CLE. DIGI COURT

No. CR-37738

STATE OF NEW MEXICO, THIS MOTIOT 15 EIT SR ied ik

Plaintiff, ON___2a- ae AAS

BEFORE f° oa

vs. The ; an: ols oe:

FRANCIS THOMAS DEUTSCH, | {2;: a eit’ ts

a/k/a FRANK DEUTSCH, bs. es 01 1985

Defendant.

AMENDED MOTION FOR RECONSIDERATION

OF SENTENCE

COMES NOW the Defendant, Frank Deutsch, by and through

his counsel of record, FRANCHINI, HENDERSON, WAGNER

& OLIVER (Gene E. Franchini), and amends its original Motion

filed January 31, 1985 as follows:

With regard to Paragraph 1: .. . That in the alternative Defend-

ant moves the Court to declare that its refusal to enforce the plea

and disposition agreement entered into by the State and this

Defendant is an appealable issue. That the Court set an appeal

bond on this matter by continuing the bond filed by the Defendant

in Cause Number 37738 and apply it to this Cause Number 37206.

FRANCHINI, HENDERSON,

WAGNER & OLIVER

Ma

Gene E. Pranchini

Attorneys for Defendant

320 Gold S.W., Suite 816

Albuquerque, NM 87102

505/242-6300

A eee ae REN ee

E-7

I hereby certify that I have

hand-delivered a true and

correct copy of the foregoing

to opposing counsel of

record, this 1 day of

February, 1985.

4

Gene E. Pranchini

E-8

SECOND JUDICIAL DISTRICT COURT

COUNTY OF BERNALILLO

ENDORSED

STATE OF NEW MEXICO

FILED IN MY OFFICE THIS

No. CR 37738 and CR 37206 FEB 06 1985

STATE OF NEW MEXICO, Eloise E. Young

Plaintiff, CLERK DISTRICT COURT

vs.

FRANCIS THOMAS DEUTSCH

a/k/a FRANK DEUTSCH,

Defendant.

ORDER

THIS MATTER coming on before the Court on this 6th day of

February, 1985, the Court hearing arguments of counsel and being

otherwise fully advised,

IT IS, THEREFORE, ORDERED, ADJUDGED AND

DECREED:

1. That the Motion for Reconsideration of Sentence be and the

same is hereby denied.

2. That the Court declares that its refusal to enforce the Plea

and Disposition Agreement in cause #CR 37206 is an appealable

issue;

3. That the bond set and posted by the Defendant in cause #CR

37738 in the sum of $100,000.00 be and the same is continued dur-

ing the appeal of this matter and is hereby set as an appeal bond in

this cause and in cause #CR 37206.

4. That the Defendant be released pending appeal of these

causes together with the attached conditions of release.

PHILIP R. ASHBY

DISTRICT JUDGE

5 ne a ome

E-9 ENDORSED

FILED IN MY OFFICE THIS

SECOND JUDICIAL DISTRICT COURT

STATE OF NEW MEXICO FEB 1 4 1986

COUNTY OF BERNALILLO Lh Ek

No. CR 37206/CR 37738 eta Court

THIS MOTION IS SET FOR HEARING

STATE OF NEW MEXICO, One L219 eg te

=P BEFORE JUDGE__PHILIP_R. ASHBY

Plaintiff, The party filine the motion is

responsible for serving all

vs. Gaye othe notice. FEB 14 1996

FRANCIS THOMAS DEUTSCH, Clerk =

A/K/A FRANK DEUTSCH,

Defendant.

MOTION FOR RECONSIDERATION OF SENTENCE

COMES NOW the Defendant, Frank Deutsch, by and through

FRANCHINI, HENDERSON, WAGNER & OLIVER (Gene E.

Franchini), and JOHN KELLEHER, his counsel of record, and

moves the Court to reconsider the sentences imposed in these

cases, and as grounds therefor, states:

1. As to Cause Number 37738, Defendant moves the Court to

reconsider its nine year sentence because the Court of Appeals has

reversed and dismissed seven forgery convictions against the

Defendant. Said Court has not granted a new trial as to the other

convictions of fraud, larceny and embezzlement, even though all

the evidence as to the reversed forgery convictions was heard by

and submitted to the jury to the prejudice of the Defendant.

Defendant therefore requests that this Court take these factors

into consideration and reconsider and amend its prior sentence.

2. As to Cause Number 37206, Defendant moves the Court to

modify its three year sentence imposed upon the Defendant and

either suspend or defer the imposition of that sentence and enforce

the plea and disposition agreement entered into by the State and

E-10

this Defendant. In the alternative, Defendant moves the Court to

run any previously imposed sentence concurrently with any

sentence imposed in Cause Number 37738.

3. Defendant further moves this Court to suspend in whole or in

part the total sentence previously imposed by the Court for the

reasons set forth above, for the reason that the Defendant has no

prior record of criminal activity, and for the reason that Defend- —

ant is willing to make restitution to any person who was financially

damaged as a result of the subject matter of these causes of action.

FPRANCHINI, HENDERSON,

WAGNER & OLIVER

a JOHN KELLEHER

a ee 2

BY: Gene E. Franchini

Attorneys for Defendant

P. O. Box 25167

707 Broadway NE, Suite 100

Albuquerque, New Mexico 87125-5167

505/242-6300

I hereby certify that a true copy

of the foregoing was forwarded to

counsel of, record on the _/Y/____

day of , 1986.

'«& ora f .

Gene E. Franchi

APPENDIX F

Br , REG SAME IIE TET CPL LES a

F-1 EhivUKScU

FILED IN MY OFFICE THIS

SECOND JUDICIAL DISTRICT

COUNTY OF BERNALILLO JAN 1 03985

STATE OF NEW MEXICO SS

ie CLERK DISTRICT COURT

STATE OF NEW MEXICO,

Plaintiff, No. CR 37738

v.

FRANCIS DEUTSCH,

Defendant.

MOTION FOR POST-TRIAL HEARING ON TAINT

COMES NOW the defendant, by and through counsel, and

moves this Court for an order granting an evidentiary hearing con-

cerning:

1. The circumstances surrounding defendant’s cooperation with

the investigation culminating in his indictment and;

2. Harold Douglass’ interception and opening of defendant’s

personal mail and the uses made by the government of the fruits of

this criminal and warrantless search.

In the event a hearing is granted, at the conclusion thereof the

defendant will further move the court suppress all testimony and

exhibits derived from such unlawful search and seizure, to set aside

the jury verdict, and dismiss the indictment herein.

This motion is based upon the accompanying Affidavit Of John

J. Kelleher, Memorandum Of Law, and the testimony and exhibits

received during trial of this case.

We eee. ats

{\ @ 66 J

CR re ewes et > f

BEPCTE [SDS aad

The party tii.a7 gf cuce 3

respeasit.c ice ety

perues eaiccs fo coust.

By ee a

er | ew)

lbuque ¢, Jew Mexico 87102

(619) 260-4600 «xt 4380°

January 8, 1985

F-2

CeewUNC CU

FILED

SECOND JUDICIAL DISTRICT MEO IN MY OFFICE THIS

COUNTY OF BERNALILLO JAN 1 01985

STATE OF NEW MEXICO

| Sins

STATE OF NEW MEXICO,‘ CUEKr BISTRICT COUR)

Plaintiff, : No. CR 37738

Wie :;

AFFIDAVIT

FRANCIS DEUTSCH, . OF

Defendant. : JOHN J. KELLEHER

JOHN J. KELLEHER, being duly sworn, deposes and says:

1. I represent Francis Deutsch, defendant in the captioned case,

and submit this affidavit in support of defendant’s motion for a

post trial evidentiary hearing. The following facts are sworn to as

of my own knowledge except those stated to be on information

and belief. As to matters stated to be on information and belief, I

believe the facts stated to be true.

2. Defendant was convicted after a twelve day jury trial of

fifteen counts of the seventeen counts charged in the indictment.

Count Seventeen of the indictment (Racketeering) was dismissed

by nolle prosequi on the first day of trial. Count Sixteen (Solicita-

tion) was dismissed at the conclusion of the government’s case.

3. On the first day of trial, Tuesday, December 4, 1984, defense

counsel requested access to tape recordings made of telephone

conversations between government agents and various witnesses,

including the defendant. Such recordings had been ordered to be

provided pursuant to pre-trial discovery, however, none had been

delivered. There is an unresolved issue of fact as to whether

counsel for the State had previously made access to the tape

recorded conversations available to other counsel for the defend-

nt. Defendant’s trial counsel first became aware of the existence

Om ie 2 Ry eal ah IE 2 nc

F-3

of such recordings when reading agent’s reports received in

discovery during the week immediately before commencement of

the trial and reviewed over the weekend of December Ist. |

4. On the second trial day, Wednesday, December 5, 1984,

counsel for the state produced one reel-to-reel and three cassette

tapes advising defense counsel that these tapes were available for

review in the office of the Attorney General during business hours.

On information and belief, on the following day, Thursday,

December 6, 1984, Ms. Dal Santo, an associated attorney working

with defense counsel, appeared at the office of the Attorney

General and was provided with not four, but fourteen tapes of

recorded conversations of government agents, the defendant and

others. Unable to review the tapes in their entirety under the time

pressures of trial, Ms. Dal Santo catalogued the tapes, took sam-

plings and reported back to affiant.

5. Defense counsels’ motion for a mistrial based upon late

discovery of the tapes was denied without hearing, leaving

unresolved the issue of whether the untimely discovery of the tapes

was the result of prosecutorial misconduct or defense counsels’

failure to pursue diligently the discovery ordered.

6. On Friday, December 7, 1984, affiant commenced listening

to the many hours of discovered tapes. In the course of this

review, affiant first discovered impartial support for defendant’s

claim that Government investigators had given his repeated assur-

ance that their investigation was not targeted on him, thereby lull-

ing defendant into further cooperation with the investigation

which resulted in his indictment. Further, the tapes provided im-

partial evidence that Harold Douglass, the court appointed

‘*Trustee of the Cash’’ of Guaranteed Equities, had intercepted

and opened personal mail of the defendant and other persons

employed at Guaranteed Equities. This support was found in a

recorded conversation between Leslie Malek, a State’s witness

before the Grand Jury and at trial, and Ross Becker an investi-

gator for the Attorney General’s Office. In a telephone

———_---

F-4

conversation being secretly recorded by Becker, Ms. Malek related

that she had been directed by Douglass to open all mail, even the

personal mail, of the defendant.

7. Although Harold Douglass denied any such order or activity

when recalled for additional cross-examination after this item

became known to the defense, Leslie Malek in her trial testimony

confirmed that Douglass had ordered her to open defendant’s per-

sonal mail. Alan Wedvik, a defense witness, testified that to his

knowledge Deutsch’s and his own personal mail had been received

from Douglass in an opened condition. Wedvik even recalled

receiving an item of social mail from Douglass already opened.

Deutsch too, testified that he received personal mail, including

confidential mail addressed to him from attorneys regarding

unrelated matters, in an opened condition during the trusteeship

of Harold Douglass. At no time during his testimony did Douglass

claim that he opened defendant’s personal mail as a matter of right

under any court order. Although the proof was overwhelmingly to

the contrary, Douglass simply denied such activity.

8. It is undisputed that Harold Douglass was reporting to the

Attorney General’s Office during the period during which he is

alleged to have intercepted and opened personal mail. Douglass

himself testified at trial that he sought legal counsel concerning his

authority to open mail from Ms. Mary MclInerny, then an Assist-

ant Attorney General.

9. At defense counsels’ motion, this court took judicial notice

of Title 18 United States Code Sections 1701 & 1702, each of which

makes unlawful interception of personal mail a federal crime. It is

indisputable that such misconduct, if proved, would constitute a

violation of the Due Process and Search and Seizure provisions of

the Fourth, Fifth and Fourteenth Amendments to the United

States Constitution.

10. Defense counsel made a timely motion for a mistrial, sup-

pression of the evidence and dismissal of the indictment based

Mtn itn. <Midn a

F-5

upon the foregoing facts. Agent reports were submitted as ex-

hibits indicating that during the time of Douglass’ trusteeship, a

‘‘confidential informant’’ was feeding government agents personal

information about the defendant of a type which appears to have

been gleaned from defendant’s private mail. Defendant’s

American Express card number and usage, travel agency records,

and telephone tolls were all ‘‘confidentially’’ provided to govern-

ment investigators. Other reports indicated agent contact with

persons involved in unrelated law suits and business with defend-

ant. On information and belief, at this same period of time,

Douglass was intercepting defendant’s personal correspondence

from attorneys, travel agents, the telephone company and

American Express and delivering it to defendant in an opened con-

dition. It is defense counsels’ understanding that this Court’s

denial, without evidentiary hearing, of defendant’s mid-trial mo-

tion to suppress assumed the truth of the allegations that Douglass

violated federal criminal law and the United States Constitution

and that Douglass was the ‘‘confidential informant’’ who so

thoroughly disclosed defendani’s private affairs to other govern-

ent investigators. The Court held that since no specific item of

the State’s evidence could then be traced directly to Douglass’

misconduct, the motion must fail. For the reasons set forth in the

accompanying Memorandum of Law, it is counsels’ position that

the Court’s ruling misconstrues the burden of proof once a prima

facie showing of an unlawful search by a government agent has

veen made.

11. The trial motion amounted to a reiteration of a pre-trial mo-

tion to suppress all defendant’s statements and fruits thereof ad-

ding an additional basis. The pre-trial motion was based on

defendant’s contention that his cooperation with the government

investigation culminating in the instant indictment was fraudulent-

ly procured by promises that he was not under investigation. This

motion too was denied because, pre-trial, defendant was unable to

specify which of the many items of evidence provided by him

would be offered by the State in its case against him. There was no

statement or other evidence which was particularly incriminating

F-6

in and of itself. The tape recorded conversations of the defendant

with government agents lend powerfui additional factual support

to defendant’s contentions in this regard. Unfortunately, this

evidence was not known to the defense at the time of its pre-trial

motion.

12. After the Court’s denial of the mid-trial motion to suppress,

a defense case was presented which, in relevant part, is summariz-

ed above. One further item, however, bears analysis. After the

defendant testified on direct, he was subject to searching cross-

examination by State’s counsel. Among the areas covered in this

cross-examination was a loan received by defendant from an entity

identified as ‘‘Penvest,’’ a New York pension trust management

company. The details of this loan were confidential and not part

of the books and records of Guarantee Equities. On information

and belief, this loan had been the subject of attorney-client corre-

spondence addressed personally to defendant at his Guaranteed

Equities office during the time Douglass was intercepting and

opening defendant’s personal mail. It is defendant’s position that

even assuming he has the burden of showing that the fruits of

Douglass’ misbehavior were harvested by the prosecution, this

burden has been met. The State’s use at trial of the information

regarding Penvest establishes a direct link between Douglass’

criminai interception and opening of defendant’s mail and the

evidence used in the State’s case at trial.

13. For the foregoing reasons, defendant respectfully requests

that this court conduct a full hearing into the circumstances sur-

rounding defendant’s cooperation with the government’s investi-

gation, Harold Douglass’ interception of defendant’s personal

mail, the identity of the government’s ‘‘confidential informants,”’

and the State’s use of the fruits of these activities in presentation

of the case against defendant to Grand Jury and trial jury.

Sworn to Before Me

This £@ Dey of January, 1985

Notary wblic

ate

ie a be AS SC alent Ow PEL a Net

a cA WG ta MAO Wi.

FW AE ci dati Se ta!

sat Ase

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F-7

m WIN

FILED IN F ic

SECOND JUDICIAL DISTRICT MY OFFICE THiS

COUNTY OF BERNALILLO JAN 01985

STATE OF NEW MEXICO

SGaS, Z

STATE OF NEW MEXICO,‘ CLE: DISTRICT COURT -

Plaintiff, ° No. CR 37738

i MEMORANDUM OF LAW

FRANCIS DEUTSCH,

Defendant.

INTRODUCTION

This Memorandum of Law and accompanying Affidavit of

John J. Kelleher are submitted in support of defendant’s motion

for a post-trial hearing concerning: 1. The circumstances surroun-

ding defendant’s cooperation with the government investigation

which culminated in the instant indictment; and 2. The intercep-

tion of defendant’s personal mail by government agents and use of

the fruits of this warrantless search in the investigation and pro-

secution of the case against him. The facts upon which

defendant’s argument is based are more fully set forth in the ac-

companying Affidavit of John J. Kelleher.

F-8

ARGUMENT

I.

HAVING MADE A PRIMA FACIE SHOWING THAT

DOUGLASS MADE AN ILLEGAL SEARCH OF HIS

PERSONAL MAIL, THE DEFENDANT IS ENTITLED TO

AN EVIDENTIARY HEARING AT WHICH THE BURDEN

IS UPON THE STATE TO PROVE THAT iTS CASE IS

UNTAINTED.

The Fourth Amendment provides ‘‘The right of the people to be

secure in their persons, houses, papers and effects against

unreasonable searches and seizures shall not be violated... .’’ It

cannot be disputed that defendant’s personal mail constitutes

“‘papers’’ and, as such, is subject to fuil Constitutional protection.

The issue raised by this court’s mid-trial ruling is, having shown an

unlawful search and apparent use of the fruits of the search by

government investigators, is the defendant entitled to an eviden-

tiary hearing? In Nardone v. United States, 308 U.S. 338 (1939),

Justice Frankfurter addressed this precise issue in reversing a con-

viction for tax fraud. In Nardone, government agents had used an

illegal wire tap in investigating the defendant’s activities. As is the

case here, the method used violated specific federal statute and the

Fourth Amendment. The court held:

The burden is, of course, on the accused in the first

instance to prove to the trial court’s satisfaction

that wire-tapping was unlawfully employed. Once

that is established -- as was plainly done here -- the

trial judge must give opportunity, however closely

confined, to the accused to prove that a substantial

portion of the case against him was a fruit of the

poisonous tree. This leaves ample opportunity for

the Government to convice the trial court that its

proof had an independ at origin. 308 U.S. 338,

342. (Emphasis supplied.)

ee eee —_—

F-9

Three witnesses testified at trial that Douglass, a government

employee, opened or caused to be opened the personal mail of

defendant, Francis. Deutsch. Evidence was adduced tending to

show that Douglass passed this information on to criminal in-

vestigators and that they, in turn, made use of Douglass’ informa-

tion in sifting through the defendant’s affairs for evidence to pre-

sent to the Grand Jury. Additionally, defendant Kas shown that

the State made use at trial of confidential information which could

only have been known through Douglass’ opening of attorney mail

addressed to defendant, not Guaranteed Equities. Having made

such a strong prima facie showing of criminal misconduct by a

government agent in violation of the defendant’s Fourth Amend-

ment rights, Nardone dictates that a hearing must be held. At such

hearing the State must demonstrate that each item of evidence in-

troduced at trial was derived independent of the criminal activities

of Harold Douglass. See also, United States v. Tweel, 550 F.2d

297 (Sth Cir. 1977).

il.

DEFENDANT IS ENTITLED TO A HEARING

CONCERNING EVIDENCE OBTAINED FROM HIM

BY DELIBERATE DECEPTION.

In his pre-trial motions defendant requested this court to sup-

press all his statements and other evidence derived or obtained

from him because his voluntary and extensive cooperation was

procured by conscious government deception. Defendant insisted

and continues to urge that he was the victim of a pattern of false

assurances that he was not the target of any investigation and,

later, that his guilty plea to a related criminal information would

‘*close the book”’ on the government’s investigation. This allega-

tion received dramatic factual support from the tape recorded con-

versations of defendant and government agents -- tape recordings

the existence of which was unknown to the defense until the trial

had actually started. Defendant’s case is in many respects similar

to United States v. Tweel, 550 F.2d 297 (Sth Cir. 1977). In Tweel

F-10

the Internal Revenue Service failed to apprise the defendant of the

criminal nature of its investigation and through this conscious

deception obtained copies of books and records which were subse-

quently used in Tweel’s prosecution for tax evasion. In reversing

Tweel’s conviction, the Fifth Circuit remanded the case for a taint

hearing agreeing with the appellant that the ‘‘microfilming of ap-

pellant’s records constituted an illegal search in violation of the

Fourth Amendment because appellant’s consent was obtained

through deception.’’ 550 F.2d 297, 298.

The court also observed:

From the facts we find that the agent’s failure to

apprise the appellant of the obvious criminal

nature of this investigation was a sneaky deliberate

deception by the agent . . . and a flagrant disregard

for the appellant’s rights. The silent misrepresen-

tation was both intentionally misleading and

material. 550 F.2d 297, 299.

It is defendant’s contention that the tape recorded conversations

first disclosed during trial adequately demonstrate that govern-

ment investigators were both ‘‘sneaky and deliberate.’’ The defen-

dant cooperated with government investigators until almost the

eve of his indictment. Like Tweel, defendant voluntarily provided

records which formed the backbone of the prosecution against

him. Many records were even copied at defendant’s expense.

Since new evidence of the government’s deception was first obtain-

ed mid-trial, this court must grant a hearing to give defendant an

opportunity to develop facts demonstrating his assertion that his

cooperation was fraudulently procured tainting all the evidence

thereby obtained. See also, United States v. Lipshitz, 132 F.Supp.

519 (E.D.N.Y. 1985).

DOUGLASS’ CRIMINAL INTERCEPTION OF

DEFENDANT’S MAIL VIOLATES DUE PROCESS

AND CAN ONLY BE REMEDIED BY SETTING ASIDE

THE JURY’S VERDICT AND DISMISSAL OF THE

INDICTMENT.

The testimony received at trial can leave little doubt that Harold

Douglass intentionally intercepted and opened the defendant’s

personal mail. He did so without probable cause, warrant or claim

of right. Although Douglass denied opening personal mail, three

witness [sic] testified to the contrary and one, Leslie Malek, had

previously so advised government investigators in a recorded

telephone conversation. These facts clearly establish a prima facie

case that Douglass violated federal statutes relating to interference

with the mail (Title 18 U.S.C. Secs. 1701 & 1702), Conspiracy (Ti-

tle 18 U.S.C. Sec. 371), and Aiding & Abetting (18 U.S.C. Sec. 2).

They would also be sufficient, were Douglass so charged, to find

him guilty of perjury in his testimony against defendant.

The United States Supreme Court has commented frequently on

the duty of the courts to insure that the methods used by the

government in detecting and prosecuting crime do not themselves

stray into violation of the law. In Rochin v. California, 342 U.S.

165 (1952), Justice Frankfurter provided a Due Process rationale

for so policing the police as follows:

Regard for the requirements of Due Process Clause

‘*inescapably imposes on this Court an exercise of

judgment upon the whole course of proceedings

{resulting in a conviction] in order to ascertain

whether they offend those canons of decency and

fairness which express the notions of justice of

English speaking peoples even toward those charg-

ed with the most heinous offenses.’’ The standards

of justice are not authoritatively formulated

F-12

anywhere as though they were specifics. Due pro-

cess of law is a summarized constitutional guaran-

tee of respect for those personal immunities which,

as Mr. Justice Cardozo twice wrote for the Court,

are ‘‘so rooted in the traditions and conscience of

our people as to be ranked fundamental’’, or are

‘implicit in the concept of ordered liberty.’’ 342

U.S. 165, 169.

Rochin involved evidence obtained by the involuntary pumping of

the defendant’s stomach and was followed in Jackson v. Denno,

378 U.S. 368 (1964), where the Supreme Court reiterated a broad

Due Process basis for invocation of the exclusionary rule in sup-

pressing a confession:

. . . because of ‘‘the deep-rooted feeling that the

police must obey the iaw while enforcing the law;

that in the end life and liberty can be as much en-

dangered from illegal methods used to convict

those thought to be criminals as from the actual

criminals themselves.’’ 378 U.S. 368, 386.

Federal Circuit Courts have similarly relied on Due Process

reasoning when government misconduct is involved in the investi-

gation or prosecution of a criminal case. See, i.e., United States v.

Spivey, 508 F.2d 146 (10th Cir., 1975), cert. denied, 421 U.S. 949

(1975), United States v. DeSapio, 435 F.2d 272 (2d Cir. 1970).

Defendant’s argument here is similar in some respects to that

made in United States v. Payner, 434 F.Supp. 113 (N.D. Ohio

E.D. 1977), where District Judge Manos was asked to suppress

evidence obtained by a criminal breaking and entering into the

briefcase of a bank official who was not a defendant in the case.

Because the defendant in Payner did not have standing to raise the

Fourth Amendment violation (he had no interest in the apartment

entered or briefcase broken into), he relied entirely on Due Process

grounds in seeking to suppress photographic copies of records

F-13

found in the briefcase and proposed to be used against him.

Payner argued that the the [sic] criminal conduct of government

agents was so Outrageous that he should be permitted to raise it as

a violation of Due Process. Judge Manos carefully reviewed the

facts and controlling authority finding that the government ‘‘was

an active participant in . . . admittedly criminal conduct... .’’, 434

F.Supp. 113, 121. The court held:

The Court finds that the illegal conduct of the

government officials involved in this case compels

the conclusion that they knowingly and purpose-

fully obtained the briefcase materials with bad

faith hostility toward the strictures imposed on

their activities by the Constitution.

The activities of the Government agents . . . were

outrageous. They nlotted, schemed and ultimately

acted in contravention of the United States Consti-

tution and the laws of Florida, knowing that their

conduct was illegal. It is imperative to signal to all

likeminded individuals that purposeful criminal

acts on behalf of the Government will not be

tolerated in this country and that such acts shall

never be allowed to bear fruit. 434 F.Supp. 113,

130-131.

It is defendant’s position that the facts already adduced at trial

demonstrate that Harold Douglass, a government agent, acted in

conscious disregard for defendant’s constitutional rights and in

direct violation of federal! statutes expressly designed to protect

those rights. Further this Court could find that Douglass’

dishonesty when testifying concerning this misconduct

demonstrates precisely that callous disregard for the Constitution

and law of the land which must not be permitted to go unpunish-

ed. Douglass testimony and all evidence derived from his activities

should be suppressed.

F-14

CONCLUSION

WHEREFORE, this court should grant the defendant’s motion

in all respects.

Resvectfully Submitted,

Attorneys for Defendant

320 Gold Avenue, S.‘.

Albuauergue, Nr &7102

January 8, 1985

! HEREBY CERTIFY that true copies of the foregoing Motion

for Post-Trial Hearing on Taint, Affidavit of John J. Kelleher,

and Memorandum of Law were forwarded to John G. McKenzie,

Assistant Attorney General, Post Office Drawer 1508, Sante Fe,

New Mexico, 87504 - 1508, this 10 day of January, 1985.

F-15

SECOND JUDICIAL DISTRICT ok 4) cy Qonee i

ual : F* “tue ‘2

COUNTY OF BERNALILLO

STATE OF NEW MEXICO JAN3 0 1995

STATE OF NEW MEXICO, ae

Plaintiff, heme rwtnend Sal

VS. No. CR 37738

FRANCIS THOMAS DEUTSCH,

a/k/a FRANK DEUTSCH,

Defendant.

ORDER

THIS MATTER having come before the Court upon the motion

of the Defendant for a post-trial evidentiary hearing on taint on

evidence used by the prosecution, and the Defendant appearing

both personally and by his attorneys, Gene Franchini and John

Kelleher, and the State appearing by Attorney General Paul Bar-

dacke and Assistant Attorney General, and the Court being fully

advised in the premises of the motion;

IT IS HEREBY ORDERED that the Motion be denied.

IT IS FURTHER ORDERED that the State shall produce to the

Court for inclusion in the Record Proper originals or copies of

those tapes containing conversations of the Defendant as alleged

by the Defendant and in the possession of the State.

Pb Z Lay

District Judge

Assistant Attorngy General “Attorney for the Defendant

APPENDIX G

G-1

SECCND JUDICIAL DISTRICT FLED um MY OFFice _

COUNTY OF BERNALILLO :

STATE OF NEW MEXICO 70Ck 1 01984

STATE OF NEW MEXICO, kere

Plaintiff, cue ber col

Vv. No. CR 37738

FRANCIS DEUTSCH, a/k/a

FRANK DEUTSCH,

Defendant.

MOTION TO PRECLUDE TESTIMONY AND

STRIKE COUNTS 4, 5, 16 AND 17 OF THE

GRAND JURY INDICTMENT

COMES NOW the Defendant, by and through counsel, and

moves this Court to preclude the testimony of Richard Grodner

and strike Counts 4, 5, 16 and 17 of the indictment in this matter,

and as grounds therefor, states:

That at all times relevant to the indictment in the above matter,

Richard Grodner was an attorney employed by the Defendant, and

there was, therefore, an existing attorney/client relationship.

It is believed that Counts 4, 5, 16 and 17 are based on Mr.

Grodner’s testimony and such testimony should not be used to

make any element of those Counts. Furthermore, upon informa-

tion and belief the entire indictment may be tainted by such

testimony and the Defendant reserves the right to move to dismiss

G-2

the entire indictment at a later date, after review of the Grand Jury

testimony.

T.:B. Keleher & Associates bid

Post Office Box 1246 "75%

Albuquerque, Hew ‘Mexico: a hh sg

(S05) 265-6441 x0 fe on a,

I HEREBY CERTIFY that a true copy of the foregoing Motion

To Preclude Testimony and Strike Counts 4, 5, 16, and 17 of the

Grand Jury Indictment was forwarded to John G. McKenzie,

Assistant Attorney General, Post Office Drawer 1508, Santa Fe,

New Mexico, 87504-1508, this 10th day of October, 1984.

APPENDIX H

H-1

IN THE SUPREME COURT

FOR THE STATE OF NEW MEXICO

STATE OF NEW MEXICO,

Plaintiff/Respondent,

VS. No.

FRANCIS THOMAS DEUTSCH,

Defendant/Petitioner,

PETITION FOR WRIT OF CERTIORARI

TO THE COURT OF APPEALS

ON

CRIMINAL APPEAL FROM THE DISTRICT COURT OF THE

SECOND JUDICIAL DISTRICT

BERNALILLO COUNTY, NEW MEXICO

Submitted by: JOHN J. KELEHER

c/o FRANCHINI, HENDERSON

WAGNER & OLIVER

(619) 260-4600 ext. 4380

GENE E. FRANCHINI

FRANCHINI, HENDERSON,

WAGNER & OLIVER

P. O. Box 1487

Albuquerque, New Mexico 87103

(505) 242-6300

Attorneys for Plaintiff/Respondent:

PAUL BARDACKE

Attorney General

Pete S. Kierst

Barbara F. Green

Assistant Attorneys General

P. O. Drawer 1508

Santa Fe, New Mexico 87504

(505) 827-608!

H-2

STATEMENT OF QUESTIONS PRESENTED

QUESTION I

DID THE COURT OF APPEALS ERR IN DENYING PETI-

TIONER’S APPEAL BASED ON LATE AND INCOMPLETE

DISCOVERY IN CAUSE NUMBER CR-37738?

QUESTION II

DID THE COURT OF APPEALS ERR IN DENYING PETI-

TIONER’S APPEAL BASED ON TAINT IN CAUSE NUMBER

CR-37738?

QUESTION III

DID THE COURT OF APPEALS ERR IN DENYING PETI-

TIONER’S APPEAL BASED UPON THE USE BEFORE THE

GRAND JURY AND AT TRIAL OF THE TESTIMONY OF

PETITIONER’S ATTORNEYS IN CAUSE NUMBER

CR-37738?

QUESTION IV

DID THE COURT OF APPEALS ERR IN DENYING PETI-

TIONER’S APPEAL BASED UPON THE IMPROPER USE OF

THE TESTIMONY OF AN EXAMINER OF QUESTIONED

DOCUMENTS IN CAUSE NUMBER CR-37738?

QUESTION V

DID THE COURT OF APPEALS ERR IN SUSTAINING THE

DISTRICT COURT’S REFUSAL TO MODIFY SENTENCE OR

GRANT OTHER RELIEF FROM THE PLEA AND DISPOSI-

TION AGREEMENT IN CAUSE NUMBER CR-37206?

QUESTION VI

DID THE COURT OF APPEALS ERR IN FAILING TO

REVERSE OR REMAND ALL REMAINING CHARGES IN

LIGHT OF ITS REVERSAL OF THE SEVEN COUNTS OF

FORGERY IN CAUSE NUMBER CR-37738?

H-3

This petition seeks review of the Court of Appeal’s decision in

State of New Mexico v. Francis Thomas Deutsch, No. 8355, filed

December 31, 1985. A copy of the opinion of the Court of Ap-

peals is attached as Appendix A.

SUMMARY OF FACTS MATERIAL TO

QUESTIONS PRESENTED

Facts in Cause Number CR-37296:

All charges against Petitioner/Defendant Deutsch (Petitioner)

arise out of his ownership of a New Mexico mortgage brokering

business commencing in the fall of 1982. At the time Petitioner

purchased the business, it and its principals were already under

criminal investigation. Petitioner cooperated with this investiga-

tion, permitting Attorney General’s investigators free access to the

books and records of the business.

By late summer 1983, Petitioner became suspicious that he

himself was the target of a criminal investigation. Finally, in the

last week of September, 1983, he was summoned to the Attorney

General’s office and told that a forty-five count indictment hud

been prepared charging him with fraud in connection with certain

business practices inherited from those who previously operated

the business. Petitioner was given two days to consider whether to

face this indictment or agree to a plea and disposition. In that

period an agreement was reached and, on September 29, 1983,

Petitioner entered a plea of guilty to Information Number

CR-37206 charging one count of Conspiracy to Commit Fraud in

Excess of $20,000 in violation of Section 30-16-6 and 30-28-2(B),

NMSA 1978, as amended, a third degree felony. A signed memo-

randum of the terms of this agreement was accepted and sealed by

District Judge Patricia Madrid on the same date. Subsequently,

Judge Madrid recused herself from the case and District Judge

Philip R. Ashby was assigned to continue the matter.

H-4

On November 1, 1984, on Petitioner’s motion, a hearing was

held before Judge Ashby concerning the State’s intentional

prevention of Petitioner’s performance of the terms of the plea

and disposition agreement. At this hearing Petitioner requested a

finding that the State, not he, had caused investor losses by,

among other things, defaming Petitioner and refusing to permit

potential salvage lenders to have access to company records con-

trolled by the State. Petitioner did not seek to withdraw his piea.

Rather, he requested that the court accept the agreement’s prin-

cipal provision from Petitioner’s perspective, to wit, that Peti-

tioner be granted either a deferred or suspended sentence in Cause

Number 37206. The State cross-examined Petitioner and his two

other witnesses at this hearing, but offered no evidence.

Judge Ashby made no ruling at the conclusion of the November

Ist hearing. However, on the State’s recommendation, the court

thereafter sentenced Petitioner to three years imprisonment in

Cause Number 37206. In response to Petitioner’s motion to

reconsider this sentence, Judge Ashby specifically denied Peti-

tioner’s motion to enforce the written agreement in plea and

disposition. Petitioner’s appeal in Cause Number 37206 is from

the District Court’s refusal to enforce the written agreement’s

sentencing provision or vacate the entire agreement.

Facts in Cause Number 37738:

Simultaneous with the criminal investigation in Cause Number

CR-37206, Petitioner became involved in civil litigation instituted

by Andrew Swarthout, Director of the New Mexico Division of

Fiancial Institutions (DFI), against Guaranteed Equities, Peti-

tioner’s wholly owned company. This litigation was settled by the

appointment of Harold Douglass, a DFI employee, as trustee of

Guaranteed. Directly at issue below and in this petition is the

lawfulness of Douglass’ intercepting, opening and sharing with

criminal investigators of personal mail addressed to Petitioner and

others at Guaranteed.

H-5

The fact that Douglass had intercepted and opened Petitioner’s

mail, including attorney/client mail, was objected to by Petitioner

from the outset. Mid-trial, in discovery, the tardiness of which is

also in isue, Petitioner’s counsel first obtained disinterested cor-

roboration of this claim and further discovered evidence that

Douglass was the ‘‘confidential informant’’ who had provided in-

formation to criminal investigators sifting through Petitioner’s af-

fairs. At trial, Douglass resolutely denied opening any mail, but

this claim was refuted by three other witnesses, including one call-

ed by the State. An immediate motion was made for a taint hear-

ing. Petitioner’s counsel made an offer of proof that Douglass

had committed criminal violation of several statutes relating to in-

terference with the mails, transmitted the fruits of this crime to At-

torney General’s Investigators preparing the case against Peti-

tioner, and that Douglass had committed perjury in his trial

testimony. The District Court refused to grant a hearing.

On the second day of trial a dispute arose between counsel for

Petitioner and counsel for the State concerning the timeliness of

the discovery of fourteen tape recordings containing conversations

surreptitiously recorded between government investigators and

Petitioner and others. Counsel for Petitioner alleged misconduct

and prejudicial delay in that the existence of the tapes was not

disclosed until the eve of trial and in that the tapes were not made

available untl the trial was well underway. Counsel for the State

disputed these facts, but objected to a hearing to establish a basis

upon which the court could rule. The District Court refused to

conduct a hearing on the disputed facts. The tapes, received and

reviewed by defense counsel after three days of trial, provided

direct evidence corroborating Petitioner’s claim that Harold

Douglass and other government agents had criminally intercepted

his personal mail without warrant or probable cause and made use

of the fruits of this search in the course of the investigation leading

to Indictment CR-37738. This issue too was focused by timely mo-

tions mid-trial and by formal post-trial motions brought by Peti-

tioner. These motions were denied.

H-6

During the course of the investigation leading to Indictment

CR-37738, the grand jury heard testimony of, among others,

Richard J, Grodner and Eric Prelo, attorneys who represented

Petitioner and Guaranteed. Neither attorney raised the attorney/

client privilege, nor did they notify Petitioner of the grand jury in-

vestigation into his affairs. Petitioner first learned that his at-

torneys had te: tified against him after the indictment was returned

and he had been arrested under a warrant issued pursuant to it. At

no time prior to his arrest was Petitioner aware that his attorneys

had been compromised by State’s investigators. Accordingly,

Petitioner had no timely opportunity to claim attorney/client

privilege, seeking judicial intervention to prevent this agregious

violation of the ethical obligation of his and the State’s attorneys.

At trial, the court permitted Prelo and Grodner to testify to con-

versations allegedly in furtherance of a never specified crime or

crimes charged in the indictment. The only crime which by its

terms related to Petitioner’s attorneys (Count 16 of Indictment

CR-37738) charged Petitioner with solicitation of Grodner to com-

mit an unspecified felony. No facts supporting this charge were

proved and this count was dismissed by the District Court at che

conclusion of the State’s case in chief. Notwithstanding repeated

motions objecting to their testimony both before the grand jury

and at trial, the District Court permitted the indictment to stand

and Grodner and Prelo’s testimony to be considered as part of the

State’s evidence.

David King, another attorney representing Petitioner, was also

called by the State to testify at trial, over objection, as to conversa-

tions he had with Petitioner. King refused to testify until directly

ordered to do so by the court. Thereafter, King related the

substance of two conversations with Petitioner and authenticated

a transcription of a tape recording of the second of the two conver-

sations. Although the conversations indicated that Petitioner was

not at all a participant in the crimes charged in Indictment

CR-37738, the State was permitted to argue that Petitioner’s

statements, made in confidence to his own lawyer, were false

H-7

exculpatory statements made in furtherance of an effort to

disguise his allegedly criminal misconduct.

Madeline Gooch, an examiner of questioned documents called

by the State, proved unable to testify with certainty that any of the

so called forgeries alleged in Indictment CR-37738 had been com-

mitted by Petitioner. Faced with a total failure of proof, the State

was permitted, over objection, to elicit Gooch’s expert opinion

that the control handwriting samples voluntarily provided by Peti-

tioner demonstrated an effort by him to disguise his true hand-

writing. (Miss Gooch had not been present when the exemplars

were provided.) The State argued that, although Petitioner was

not the actual forger of the checks in question, he had aided and

abetted unidentified others in ‘‘forging’’ his own name to in-

struments payable to him. In this light, Gooch’s testimony was ir-

relevant on the forgery counts for which she had been called to

testify.

A somewhat different basis for admitting Gooch’s testimony

was advanced at the conclusion of the trial and in the Court of Ap-

peals. Here, it was argued that Petitioner had disguised his hand-

writing, not in an effort to prevent his identification as the author

of the questioned signatures, but as a kind of admission by

misconduct of sinister involvement with the questioned checks.

Petitioner was a ‘‘bad man,’’ attempting to impede and delay

Gooch’s efforts to ferret out his unknown accomplice in forging

his own signature upon the questioned documents. Gooch’s

testimony, the State’s arguments from it, and the District Court’s

related jury instruction were all vigorously opposed by Petitioner

as legally unsound, misleading and prejudicially confusing to the

Jury. At issue in this petition is the competence, materiality and

relevance of Miss Gooch’s testimony and the prejudice to Peti-

tioner of permitting the jury to hear this and other evidence

relating to the now reversed ‘‘forgery’’ counts of Indictment

CR-37738.

H-8

Defendant was convicted after twelve days of trial on fifteen

counts of the seventeen counts charged in Indictment 37728.

Count Seventeen (Racketeering) was dismissed by nolle prosequi

on the first day of trial. Count Sixteen (Solicitation of Grodner)

was dismissed at the conclusion of the State’s case.

On January 30, 1985 the District Court sentenced Petitioner to

nine years imprisonment on his conviction in Cause Number

CR-37738, sentence to run consecutively with a three year sentence

imposed in spite of the terms of his his [sic] negotiated guilty plea

in Cause Number CR-37206. Petitioner is a married man living

with and supporting his wife and two pre-school age daughters. He

has no prior convictions. On February 6, 1985, the court denied

Petitioner’s motion to reconsider the severity of these sentences.

A timely appeal was filed by Petitioner. On December 31, 1985,

the Court of Appeals handed down an opinion reversing Peti-

tioner’s conviction on seven of the eight counts of forgery in Cause

No. CR-37738, but affirming Petitioner’s conviction and

sentences in all other respects. No further action has been initiated

by Petitioner in the District Court or Court of Appeals.

BASIS FOR GRANTING CERTIORARI

Certiorari is appropriate in this case because, unless the convic-

tion below is overturned, a grave miscarriage of justice will result.

Moreover, the District Court’s rulings and Court of Appeals deci-

sion raise substantial issues concerning: 1. Due Process of Law,

Search and Seizure, and Right to Counsel under the United States

and New Mexico Constitutions; 2. the consequences of the State’s

interference with performance under a plea bargain; 3. sufficiency

of evidence and prejudice to the accused when improper charges

are reversed on appeal without setting aside related charges heard

by the same jury; and 4. Cruel and Unusual Punishment under the

United States and New Mexico Constitutions.

H-9

The Court of Appeals decision is inconsistent with opinions of

this Court and the Court of Appeals in the following cases: Hunter

v. Kenney, 77 N.M. 336 (1967); State v. Alberts, 80 N.M. 472 (Ct.

App. 1969); State v. Bazan, 90 N.M. 209, (Ct. App.), cert. denied,

90 N.M. 254 (1977); State v. Gibson, 94 N.M. 742 (Ct. App.

1981); and State v. Sykes, 98 N.M. 458 (Ct. App. 1982). The deci-

sion is also inconsistent with the United States Supreme Court’s

decisions in: Brady v. Maryland, 373 U.S. 83 (1963); Jackson v.

Denno, 378 U.S. 368 (1964); Maine v. Moulton, ____ U.S. ___.,

106 S.Ct. 477 (1985); Messiah v. United States, 377 U.S. 201

(1964); Mooney v. Holohan, 294 U.S. 103 (1935); Nardone v.

United States, 308 U.S. 338 (1939); Pyle v. Kansas, 317 U.S. 213

(1942); Rochin v. California, 342 U.S. 165 (1952); Santobello v.

New York, 404 U.S. 257 (1971); Spano v. New York, 360 U.S. 315

(1959); United States v. Agurs, 427 U.S. 97 (1976); and United

States v. Henry, 447 U.S. 264 (1980).

There is substantial public interest at stake in this petition

because the opinion below confirms a grave miscarriage of justice,

casting doubt upon the rights of the criminal accused in several

critical areas of state and federal constitutional law.

SUMMARY OF ARGUMENTS

SEARCH AND SEIZURE: Douglass’ warrantless interception

of Petitioner’s personal mail and sharing of its contents with other

government agents denied Petitioner’s constitutional right to be

free from unreasonable search and seizure.

EFFECTIVE ASSISTANCE OF COUNSEL: The State’s solici-

tation of testimony before the grand jury by Grodner and Prelo

was a conscious abridgement of Petitioner’s right to attorney/

client confidentiality, an essential incident of the constitutional

right to effective assistance of counsel.

DUE PROCESS: Petitioner’s right to due process of law was

abriged [sic] on no fewer than six occasions: 1. when State’s

H-10

lawyers improperly induced Petitioner’s lawyers to ignore their

duty to raise attorney/client privilege on his behalf; 2. when Peti-

tioner’s attorneys improperly testified in the grand jury without

giving Petitioner timely notice and opportunity to contest their im-

proper behavior; 3. when Harold Douglass criminally intercepted

and opened Petitioner’s mail; 4. when Harold Douglass commit-

ted perjury in response to questions concerning his criminal

misconduct; 5. when the State’s attorneys delayed discovery of

critical defense evidence until the trial was weil underway; and 6.

when the trial court repeatedly denied evidentiary hearings on the

foregoing issues in the face of clear and exnlicit offers of proof by

Petitioner.

PREJUDICIAL AND INSUFFICIENT EVIDENCE: Having

dismissed seven of the fifteen counts against Petitioner, the Court

of Appeals should have found the evidence insufficient as a matter

of law and reversed on all counts. At a minimum, Petitioner is en-

titled to a new trial, untainted by the irrelevant and prejudicial

evidence relating to the legally untenable claim that Petitioner

‘*forged’’ or aided and abetted the ‘‘forgery’’ of his own name.

PLEA BARGAIN AND SENTENCE: Petitioner’s unrebutted

evidence is that the State, not Petitioner, broke the plea bargain

contract. The District Court should not have sentenced him to

prison. Even granting that the plea bargain agreement failed, the

District Court should have withdrawn the plea and permitted Peti-

tioner to contest the State on the merits of the matter. Finally, the

sentence imposed should be vacated as a matter of law because on

its face it is grossly disproportionate to the circumstances disclosed

in the record. A twelve year prison sentence for a first offender

convicted of non-violent crimes without identifiable victims is, on

its face, cruel and unusual. This Court must exercise its inherent

power to undo such a manifest miscarriage of justice.

H-11

PRAYER FOR RELIEF

WHEREFORE, Petitioner requests that this Court vacate his

conviction and sentence in both causes, dismissing Indictment

CR-37738 and permitting petitioner to withdraw his guilty plea in

Cause No. CR-37206.

Respectfully submitted,

January 20, 1986

H-12

IN THE SUPREME COURT

FOR THE STATE OF NEW MEXICO

STATE OF NEW MEXICO, ;

Plaintiff/Respondent,

vs. ‘ No.

. )

FRANCIS THOMAS DEUTSCH, } St ate

) )

Defendant/Petitioner. ) pre -¥ Lo

) ‘~ _2

CERTIFICATE OF SERVICE

I hereby certify that the Petitioner’s Petition for Writ of Cer-

tiorari was mailed to Barbara F. Green, Assistant Attorney

General, P. O. Drawer 1508, Santa Fe, New Mexico 87504, on the

20th day of January, 1986, pursuant to Rule 22(c) of the New

Mexico Rules of Appellate Procedure, along with a copy of this

Certificate.

FRANCHINI, HENDERSON

WAGNER & OLIVER

ae Ae / i; :

By: ‘ Kenneth R. Wagner/for

Gene E. Franchini

Attorneys for Petitioner

P.O. Box 1487

Albuguerque, New Mexico 87103