The opinion of the court was delivered by: Robert F. Kelly, J.
Presently before the Court is Leonard A. Pelullo's ("Pelullo")
Petition under 28 U.S.C. § 2255 challenging his 1995 convictions.
In February 1991, the Grand Jury returned a multi count indictment
against Pelullo charging him with wire fraud and racketeering. The
Indictment averred that Pelullo had conducted several fraudulent schemes
to divert corporate funds to his personal use. The fraudulent diversions
included a February 25, 1986 wire transfer of $114,000 from a corporate
bank account to the Palm Beach Heights Development Corporation ("PBH") to
a bank account in Philadelphia controlled by Pelullo. The fraudulent wire
transfer was charged as a wire fraud violation (Count 54) and a
racketeering act ("RA 60") in the racketeering count (Count 55).
At trial, in June of 1991, the Government's evidence established that
Pelullo had diverted the $114,000 from the PBH account to repay a
personal debt he owed to Anthony DiSalvo, a loan shark associated with the
Philadelphia Mafia. The Government's evidence showed that Pelullo had met
with Nicodemo Scarfo and Phillip Leonetti, members of the Philadelphia
Mafia at Scarfo's residence in Florida to discuss repayment of the debt
Pelullo owed to the loan shark. According to Leonetti, who testified for
the Government, this meeting occurred after Christmas Day of 1985, but
before a date in the early part of January 1986 when Scarfo and Leonetti
returned to Philadelphia. The Jury convicted Pelullo of Count 54 and
Count 55, finding that RA 60 had been established. On appeal, the United
States Court of Appeals affirmed the conviction on Count 54, but vacated
the conviction on Count 55 and ordered a new trial. See United States v.
Pelullo, 964 F.2d 193 (3d Cir. 1992).
In October 1994, the Government produced to Pelullo copies of
surveillance logs of physical surveillance conducted at Scarfo's Florida
residence for the period January 1 through January 31, 1986. (Defense
Exhibit No. 1). The Government also disclosed that surveillance had been
conducted at Scarfo's residence on December 27, 28 and 29, 1985. (Defense
Exhibit No. 2). Following a retrial in January 1995, a jury convicted
Pelullo of Count 55, finding that RA 60 had been established, and
multiple wire fraud counts. The Third Circuit Court of Appeals affirmed
these convictions. See United States v. Pelullo, 173 F.3d 131 (1999).
Pelullo filed a prior petition under 28 U.S.C. § 2255 alleging that
Count 54 should be vacated because the Government had failed to produce
three pieces of evidence, including the surveillance logs, which the
Government turned over to him in October 1994, which constituted
exculpatory evidence under Brady v. Maryland, 373 U.S. 83 (1963) that
should have been turned over to him before the 1991 trial. The Third
Circuit vacated the conviction on Count 54. See United States v.
Pelullo, 105 F.3d 117 (1997).
PELULLO'S JANUARY 21, 1998 § 2255 PETITION
This present petition challenges the 1995 convictions. The hearing on
this petition was delayed because Pelullo was in federal custody in the
state of Florida awaiting trial on a separate federal criminal
indictment. Pelullo, and his counsel, requested that the hearing be
continued until such time as he could be present. Because this Court is
aware that Mr. Pelullo has always taken an active part in his various
court proceedings, I agreed. When Pelullo finally became available, this
Court, after consultation with the attorneys, scheduled a hearing for
August 24, 2000.
On August 11, 2000, Pelullo filed a motion seeking court-authorized
discovery in connection with his § 2255 Petition, which at that point
had been pending for thirty-two (32) months. He also requested an
indefinite continuance of the hearing scheduled for August 24, 2000 so
that he could search for additional surveillance material. On August 22,
2000, this Court denied Pelullo's motion for discovery and a
continuance. At the August 24, 2000 hearing, counsel for Pelullo called
Stephen Bertucelli to testify regarding the issue of surveillance of
Scarfo's residence and produced exhibits relating to that issue. Although
Pelullo was present at the hearing, he did not testify.
The Petition alleged that the Government failed to produce the
following items: (a) surveillance records of Scarfo's residence; (b) an
FBI Form 302 Report by Special Agent Gary Scalf ("the Scalf Report"); (c)
information about Government payments to Leonetti; and (d) 37 additional
pieces of evidence. Pelullo alleged that each of these items constituted
Brady material. See Petition at 5-7.
On March 26, 1998, the Government filed its response to Pelullo's
Petition opposing his contention that the Government had failed to
produce Brady material. At the conclusion of the August 24, 2000 hearing,
Pelullo withdrew his contention that the Government had failed to produce
37 additional items of alleged Brady material. (Tr. at 96). Pelullo also
acknowledged that he was not pursuing the claims that the Government had
failed to produce the Scalf report and the information regarding payments
to Leonetti. Id. Pelullo's counsel also acknowledged that his Brady claim
was limited to specific items: an FBI Form 302 Report prepared by Special
Agent Richard McKeen and a surveillance report prepared by Pennsylvania
State Trooper Joseph P. Moran. Pelullo also asserted that any
surveillance records revealed by these reports, which had not been
produced, would also constitute Brady evidence.
PELULLO HAS FAILED TO ESTABLISH THAT HE DID NOT POSSESS THE McKEEN
AND MORAN REPORTS PRIOR TO OR DURING THE 1995 TRIAL.
At the evidentiary hearing, Pelullo failed to offer any evidence
as to when he received those reports. At that hearing, the Court
asked the following question:
THE COURT: When did you get Moran's report? Do you know the date?
MR. WERBEL: I do not have the date, Your Honor. My understanding is
that it was at some point this year, earlier this year we received Agent
Moran's report from another attorney that had been given it from the
U.S. Attorney in their case.
THE COURT: Okay. And the other, McKeen?
MR. WERBEL: The McKeen report was part of our original Section 2255
that was filed, and we've had that, and that was also Your Honor from
another attorney that received it from a different U.S. Attorney in a
The only other references to this issue were the following:
Pelullo's counsel represented at the hearing that the Moran report was
received on January 28, 2000, from a defense attorney in another matter.
(Tr. at 81-82);
Pelullo's counsel represented in his Proposed Findings of Fact that
Pelullo received the Moran report from another defense attorney in
January of 2000;
Pelullo's counsel represented in his Proposed Findings of Fact that
Pelullo received the McKeen report from Robert Simone but does not state
when he received it.
This is a uniquely important issue in this case because we know that
counsel for Pelullo has represented that Pelullo obtained the McKeen
report from Robert Simone. This is the same source from whom Pelullo
obtained the Kurtz memorandum, a document that was part of the basis for
Pelullo's first Section 2255 Petition. On March 8, 1993, Pelullo filed a
Motion for a New Trial based on newly discovered evidence, in which
Pelullo's counsel stated: "he obtained the [Kurtz] memorandum from the
defense in the case of United States v. Simone and DiSalvo sometime
during the second [Pelullo] trial." Motion at 4. Since Pelullo obtained
discovery material relating to the government's proof of the DiSalvo
transaction from Simone in January of 1993, and since Pelullo has
represented that he obtained the McKeen report from the same source but
without specifying when he received it, the reasonable inference is that
Pelullo could have obtained the McKeen report from Simone as early as
January 1993. It is crucial to Pelullo's claim that he establish that he
did not possess this material prior to or during the 1995 trial, and he
has failed to do so. In the reply to the Government's position on this
point, Pelullo's counsel attempted to remedy this failure by introducing
arguments of counsel about the circumstances of how and when Pelullo
obtained these materials. See Reply at 12-13. I find that arguments of
counsel in a legal memorandum do not constitute competent legal
The Moran report was prepared by a Pennsylvania State Trooper from his
own observations and from reports in the custody of the Metropolitan
Organized Crime Intelligence Unit ("MOCIU"). I have reviewed the Moran
report (Defense Exhibit 3) and compared it to the surveillance logs and
disclosures made to Pelullo during the 1995 trial (Defense Exhibit 1,
2). I find that the Moran report is a partial summary of the much more
detailed information contained in the disclosures made to Pelullo before
the 1995 trial. The Moran report does not identify any surveillances or
results of surveillances that were not disclosed to Pelullo before the
I find that Pelullo has failed to establish that the McKeen report and
the Moran report were suppressed within the meaning of Brady v.
Maryland, and has, therefore, failed to establish a Brady violation. I
find also that Pelullo has failed to establish that the Moran report was
a document within the possession or control of the Government, subject to
disclosure under Brady. Trooper Moran was a Pennsylvania State Trooper.
His report indicates that he was participating in the surveillance of the
Scarfo house in connection with a separate investigation of Joseph
Pungitore. See Defense Exhibit 3, at 1. The McKeen report identifies the
agencies participating in the surveillance, but does not identify the
Pennsylvania State Police as one of the participating agencies. See
Defense Exhibit 4, at 1. There has been no evidence produced showing that
the Moran report was in the possession and control of the Government. The
Court finds, therefore, that Pelullo has failed to establish that the
Moran report was a document within the possession and control of the
Government or any agency participating in the investigation.
PELULLO HAS FAILED TO ESTABLISH THAT THE McKEEN AND MORAN
REPORTS WERE ...