Thursday, May 1st, 2008

Government’s “Question[able],” “Troub[ling]” and “Disingenous” Conduct Results in an Affirmance. Huh?

United States v. Blech, No 05-3600-cr (2d Cir. April 23, 2008) (Sotomayor, Parker, Hall, CJJ).

Two defendants who were convicted of securities and related frauds appealed on the ground that their cases were misjoined, and one advanced a Brady claim. The court affirmed, but only out of apparent deference to the district court’s findings under the “abuse of discretion” standard.

The Severance Issue

This case went to trial on a thirteen-count indictment that alleged two separate fraud schemes. The first involved appellant Brandon, who, along with others, defrauded customers of Credit Bancorp of more than $200,000,000. The second scheme involved appellant Wexler, who also defrauded Credit Bancorp customers, but in a different way. The district court denied their severance motions, and both were convicted.

The defendants’ severance claim was unusually strong. Although the two schemes shared some participants, and both targeted Credit Bancorp customers, they were otherwise completely distinct. Nevertheless, the appellate court found no error.

The court held that the joinder was permissible under Rule 8(b), even though the two schemes were not – and could not – have been charged as a single conspiracy. Rule 8(b) was still satisfied because the indictment alleged a sufficient overlap in parties and transactions. Nor were the defendants prejudiced by the joinder; the court cited the small risk of “spillover prejudice” and the district court’s limiting instructions.

Nevertheless, the court noted, “[W]e question the government’s decision to try the two conspiracies together.” Neither defendant knew of the other’s activities, it did not appear that one scheme would have been admissible background evidence during the trial of the other had they been severed, and the government unfairly “lump[ed] together all of the conspirators during its rebuttal summation.” So why did it affirm? The district court did not abuse its discretion “given the flexibility of the standard.”

The Brady Claim

Many, many months before trial, the government produced more than two hundred boxes of discovery. One week before trial, it provided to defendant Brandon exculpatory information – the grand jury testimony of a cooperating witness. It waited until the eve of trial to turn over even more Brady material – the FBI agent’s notes of that cooperator’s debriefing. These materials supported Brandon’s claim that he was unaware of the unlawful aims of the conspiracy with which he was charged.

Nevertheless, the circuit found no Brady violation, even though the government “disingenuous[ly]” argued that the material was not exculpatory. In fact, the court concluded that the evidence “quite obviously could be viewed as” favorable to Brandon. The government also disingenuously argued that the evidence was not exculpatory because there was other evidence of guilt, another ridiculous assertion that the court rejected.

But it still affirmed, because the district court found no bad faith (it seems that, here, the government reserved its bad faith for its appellate briefs), and “we do not go to far as to overturn that conclusion.” The court also noted that there was “no probability” that the late disclosure affected the outcome of Brandon’s case. It did provide, however, a stern warning that the government “should have” complied with Brady, but that, of course, gets Brandon nowhere.


Enough of the free passes! If the court is really serious about curtailing such sharp practice on the part of the government, it needs to start reversing convictions in cases like this.

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