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UNITED STATES v. FISHER

June 29, 1988

United States of America
v.
Herbert K. Fisher and Herman Bloom



The opinion of the court was delivered by: KATZ

 MARVIN KATZ, UNITED STATES DISTRICT JUDGE.

 Defendants Herman Bloom and Herbert K. Fisher have each filed motions and supplemental motions to dismiss the indictments, based upon allegations of prosecutorial misconduct before the grand juries, and the government has responded. *fn1" After a hearing, I find no basis to grant such relief.

 Indictments were first returned against both defendants on October 23, 1986. Defendant Herman Bloom was charged in four counts with violating federal law, including violations of 18 U.S.C. § 1962 ("RICO" and "RICO conspiracy"), 18 U.S.C. § 1954 (offer to influence operations of an employee benefit plan) and 18 U.S.C. § 664 (embezzlement from an employee benefit plan). Defendant Herbert K. Fisher was charged in eight counts of violating the same statutes. A superseding indictment, involving no substantive changes in the charges against defendants Bloom and Fisher, was returned by the same grand jury on June 18, 1987 (hereinafter the "first superseding indictment"). After defendants filed their original motions to dismiss the first superseding indictment against them, a new grand jury returned another indictment (hereinafter the "second superseding indictment") against defendants Bloom and Fisher.

 At issue here is the conduct of the prosecutor and of two special agents of the Federal Bureau of Investigation ("F.B.I."), William P. Grace and Quinn John Tamm, Jr. *fn2" before the grand juries that returned the first and second superseding indictments against these defendants. *fn3" Defendants allege that the government, through its counsel and agents, engaged in prosecutorial misconduct before the grand jury by intentionally and knowingly presenting perjured testimony to the grand jury that returned the indictment and first superseding indictment, *fn4" and by engaging in an attempt to mislead the grand jury that returned the second superseding indictment, all in an effort to continuously harass and badger these defendants into cooperating with the government.

 FACTS

 A brief recitation of what occurred before the grand jury that returned the indictment and first superseding indictment is necessary here. Indeed, resolution of defendants' motions and supplemental motions is dependent on whether or not the government's empanelling of a third grand jury cured any potential prejudice which may have occurred before the earlier grand juries.

 In their original motions defendants Bloom and Fisher contend that on February 20, 1986, while testifying before the first grand jury, Agent Grace perjured himself when he testified that (1) on November 21, 1985 defendants Bloom and Fisher delivered $ 10,000 to Mr. Stephen Traitz, Jr., Business Manager of Locals 30 and 30B of the Roofers Union, as part of a kickback from the defendants' law firm (Bloom, Ocks and Fisher) to officials of the Roofers Union; (2) that defendants Bloom and Fisher and Mr. Stephen Traitz, Jr. discussed an increase in the contribution rate to the Roofers Union Prepaid Legal Fund on November 21, 1985, specifically stating that it would be needed to cover the kickback; and (3) that defendant Bloom and Mr. Thomas F. Brown had discussed the delivery of money in envelopes to various judges. In addition, defendants allege that Agent Grace's further testimony on May 1, 1986 that defendants Bloom and Fisher had delivered $ 5,000 to Mr. Stephen Traitz, Jr. on November 21, 1985 and had discussed increasing the contribution rate to the Prepaid Legal Fund specifically in order to cover the kickback was perjurious. Defendant Fisher also asserts that Agent Quinn John Tamm, Jr. perjured himself when he testified before the grand jury on May 22, 1986 that the F.B.I. had tape recorded Mr. Fisher complaining to Mr. Stephen Traitz, Jr. that the contribution rate for the Prepaid Legal Fund would have to be raised in order to cover the kickback from Mr. Fisher's law firm (Bloom, Ocks and Fisher) to the union officials. *fn5" The government denies that either the agents or the prosecutor engaged in perjury and contends instead that what transpired before these first two grand juries were merely misstatements and negligent errors, and in one instance, an error in transcription by the court reporter. *fn6"

 On January 29, 1988, shortly before a hearing was to be held before this court in order to resolve these contentions, the government notified counsel for defendants that it intended to seek a second superseding indictment. Defendants sought the intervention of this court in order to prohibit the government from going forward. After a hearing on January 21, 1988, emergency relief was denied by this court, and the government was permitted to seek another indictment against these defendants, without prejudice to defendants' right to challenge the propriety of this second superseding indictment. Defendants in their supplemental motions raise a variety of objections to the second superseding indictment and to the government's conduct in this case. Bloom and Fisher first claim that the second superseding indictment "is radically different from the first two indictments." Defendant Herman Bloom's Supplemental Motion to Dismiss the Indictment, para. 3; see also Defendant Herbert Fisher's Supplemental Motion to Dismiss the Indictment, para. 10. In particular, defendants point to the fact that in the second superseding indictment the government has enlarged the time period of the RICO conspiracy, has dropped various RICO predicate acts, and has included new individuals with roles in the RICO enterprise. In addition, the second superseding indictment contains added descriptive language in an overt act, and two additional overt acts which refer to the law firm of Bloom, Ocks and Fisher. Finally, defendants allege that the second superseding indictment has enlarged the time period of the alleged embezzlement in which Mr. Bloom is a defendant. Defendants do not contend that they face any new charges in the second superseding indictment.

 In addition to their claims that the substantive changes in the second superseding indictment have prejudiced them in their ability to defend themselves against these criminal charges, defendants allege that "the three indictments returned here constitute a pattern of harassment by the Government." Defendant Bloom's Supplemental Motion, para. 8(b). Defendants claim that the prosecutor, in his presentation to the third grand jury, "continued to mislead the grand jury and engage in fundamentally unfair tactics," Defendant Bloom's Supplemental Motion, para. 8(d), so that "the return of [the] second superseding indictment does not cure the grand jury abuse and prosecutorial misconduct which occurred in connection with the return of the original indictment and the first superseding indictment." Defendant Fisher's Supplemental Motion, para. 6.

 Specifically, defendant Bloom contends that the "government misled and inflamed the January 21, 1988 indicting grand jury" by: (1) including references to and presenting evidence of crimes of bribery and mail fraud, when neither defendant Bloom nor Fisher were charged with such crimes; (2) presenting evidence to convince the grand jury that defendant Bloom was involved in illegal kickbacks to the union officials from the first day of the prepaid legal services contract, when in fact the government had no such evidence; (3) misleading the grand jury by inaccurately describing the charges contained in the indictment; and (4) improperly trying to convince the grand jury that defendant Bloom gave money directly to union officials, when the government was aware that it had no such evidence. Defendant Bloom's Supplemental Motion, para. 8(e). In addition, defendant Fisher claims that the prosecutor engaged in misconduct before the grand jury that returned the second superseding indictment by failing "to present the grand jury with any evidence of other illegal acts engaged in by the Roofers Union officials, thereby depriving the grand jury of the factual background against which defendant Fisher acted." Defendant Fisher's Supplemental Motion, para. 11.

 DISCUSSION

 While defendants contend that the changes made in the indictments from the first superseding indictment to the second have hobbled them in their ability to defend themselves against these criminal charges, the government responds that "Superseding Indictment II differs from prior indictments because it is streamlined to allege only those acts relevant to defendants Bloom and Fisher. . . . In all other respects, Superseding Indictment II contains the same allegations against defendants Bloom and Fisher as were contained in prior indictments." Government's Answer to Defendant Herman Bloom's Motion to Dismiss, para. 3. It is well established that the government has wide latitude to obtain a superseding indictment at any time prior to trial, and may then select the indictment under which to proceed at trial. United States v. Edwards, 777 F.2d 644, 649 (11th Cir. 1985); cert. denied sub nom. Bolden v. United States, 475 U.S. 1123, 106 S. Ct. 1644, 90 L. Ed. 2d 189, 106 S. Ct. 1645 (1985); United States v. Grabinski, 674 F.2d 677, 680 (8th Cir. 1982), cert. denied, 459 U.S. 829, 74 L. Ed. 2d 68, 103 S. Ct. 67 (1982); United States v. Millet, 559 F.2d 253, 257-58 (5th Cir. 1977), cert. denied, 434 U.S. 1015, 54 L. Ed. 2d 759, 98 S. Ct. 732 (1978); United States v. Chagra, 638 F. Supp. 1389, 1392 (W.D. Tex. 1986); United States v. Horak, 633 F. Supp. 190, 195 (N.D. Ill. 1986). Indeed, the government "may have two or more indictments pending against a defendant on the same or related charges adding or subtracting pertinent counts." United States v. Cerilli, 428 F. Supp. 801, 808 (W.D. Pa. 1977), aff'd on other grounds, 603 F.2d 415 (3d Cir. 1979), cert. denied, 434 U.S. 966, 54 L. Ed. 2d 452, 98 S. Ct. 507 (1980). I find that the changes made to the second superseding indictment in no way substantially alter the charges against which these defendants must defend or the facts which they must investigate so as to prejudice these defendants. *fn7"

 The discretionary authority of the prosecution to seek the return of a superseding indictment is not, however, unlimited. The government may not return a superseding indictment against a defendant merely for the purpose of harassing or intimidating that defendant. Edwards, 777 F.2d at 649; Horak, 633 F. Supp. at 195. Indeed, the government "may not exercise its prosecutorial authority in order to punish a defendant in retaliation for his exercise of his rights rather than to further a legitimate law enforcement interest." Chagra, 638 F. Supp. at 1393. In order to establish prosecutorial vindictiveness the "defendant must establish the prosecutor's state of mind and must demonstrate that, but for vindictiveness on the part of the prosecutor, the extra prosecutorial activity would not have been undertaken." Chagra, 638 F. Supp. at 1393 (citing Comment, Two Models of Prosecutorial Vindictiveness, 17 Ga. L. Rev. 467 at 483-84 (1983)). Defendants have not met this standard, nor have these defendants shown that the superseding indictments returned in this case reflect harassment on the part of the government. Defendant Bloom contends that "the three indictments returned here constitute a pattern of harassment by the government against Mr. Bloom in order to pressure him into cooperating." Defendant Bloom's Supplemental Memorandum of Law, p. 9. Defendant Fisher likewise claims that the government has sought "to deprive defendant Fisher . . . of his right to pursue and litigate motions before this court. . . ." Defendant Fisher's Supplemental Motion, para. 10. In response, the government has stated that rather than to harass or intimidate these defendants, its purpose in seeking the return ...


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