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U.S. v. PELULLO

April 26, 2001

UNITED STATES OF AMERICA
V.
LEONARD PELULLO



The opinion of the court was delivered by: Robert F. Kelly, J.

MEMORANDUM

Presently before the Court is Leonard A. Pelullo's ("Pelullo") Petition under 28 U.S.C. § 2255 challenging his 1995 convictions.

PARTIAL HISTORY*fn1

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 different matter.

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 evidence.

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 1995 trial.

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 ...

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