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United States of America v. George Georgiou

March 18, 2011

UNITED STATES OF AMERICA
v.
GEORGE GEORGIOU



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

MEMORANDUM

Presently before this Court is Defendant George Georgiou's ("Georgiou") "Motion for a New Trial Pursuant to Federal Rule of Criminal Procedure 33, Brady v. Maryland*fn1 and The Jencks Act."*fn2 ("Third Motion for New Trial").*fn3 For the reasons set forth below, this Motion is denied.

I. FACTS AND BACKGROUND

On February 12, 2010, following a three-week trial, a jury found Georgiou guilty of one count of conspiracy, four counts of securities fraud and four counts of wire fraud.*fn4 At trial, the Government offered the testimony of its cooperating witness, Kevin Waltzer ("Waltzer"), who, at the Government's direction, had recorded numerous conversations with Georgiou and him in 2007 and 2008. (Trial Tr. vol. 11, 274, Feb. 8, 2010.)

On May 7, 2010, Georgiou filed a "Supplemented and Amended Motion for New Trial Pursuant to Rule 33." On August 20, 2010, Georgiou filed a Motion to Compel, seeking: an Order disclosing and unsealing, subject to the continuing confidentiality provisions of any applicable protective orders, certain documents filed in connection with the sentencing of government witness Kevin Waltzer which have yet to be produced, for disclosure of Brady material concerning Waltzer's mental health and record of substance abuse, and disclosure of, or authorization to subpoena if not in the government's possession, additional mental health and substance abuse records, as may relate to information contained in the Waltzer sentencing and/or Brady materials. (Def.'s Mot. to Compel at 1.) On September 20, 2010, Georgiou filed his Second Motion for New Trial; on that same day, this Court entered an Order denying Georgiou's Motion to Compel. On September 29, 2010, Georgiou filed a Motion for Reconsideration of this Court's denial of the Motion to Compel. In addition, on that same date, this Court denied Georgiou's "Supplemented and Amended Motion for New Trial Pursuant to Rule 33." (See Georgiou, No. 09-88, 2010 WL 3825700 at * 1.)

Those Motions focused on various allegations concerning the mental health and record of substance abuse of Waltzer.*fn5 On March 12, 2010, Waltzer was sentenced before United States District Court Judge Stewart Dalzell in Criminal Number 08-552. In connection with the sentencing, Waltzer's counsel submitted a report (the "Lizzi Report") by Dr. Luciano Lizzi ("Dr. Lizzi"), a psychiatrist and Clinical Professor at the University of Pennsylvania Medical School, who Waltzer had been seeing since August 2007, shortly after he began cooperating with the Government. The Lizzi Report indicated that Waltzer suffered from bipolar disorder and that he had abused cocaine and alcohol during his illegal activities between 1999 and 2006. Dr. Lizzi stated that it was his opinion that "these mental disorders, either individually, or in concert, so affected Mr. Waltzer's capacity to reason and control his impulses that they significantly contributed to his" criminal behavior during that time. (Def.'s Mot. to Compel, Ex. B.) The Lizzi Report further indicated that Waltzer had been examined and/or treated by several other psychiatrists and had been prescribed numerous prescription medications, including Paroxetine (Paxil), Seroquel, Xanax, Elavil, Trilafon, Buspar and Klonopin.*fn6 (Id.)

Following Waltzer's sentencing, counsel for Georgiou filed a "Motion of Defendant for Disclosure of Sealed Sentencing Documents as to Kevin Waltzer and for Disclosure of Brady Material," seeking the Lizzi Report, Waltzer's letter to the sentencing court and "all information, including information contained within the [Presentence Investigation Report], related to Kevin Waltzer's use of cocaine or other drugs and diagnosis or treatment for any mental disease, disorder or defect, includ[ing] bipolar disorder, including information concerning the knowledge of any member of the prosecution team about these subjects." (Def.'s Mot. for Disclosure at 2.) Georgiou's Motion was subsequently submitted to Judge Dalzell. On July, 20, 2010, Judge Dalzell granted Georgiou's Motion and ordered:

The following documents shall be UNSEALED, and defense counsel in Criminal No. 09-88 shall treat these documents as confidential and shall not file them on the public record, absent an Order of Court to the contrary: (a) The psychiatrist's report; (b) [Waltzer's] letter to the Court referred to at his sentencing hearing of March 12, 2010; and (c) All information, including that contained in the Presentence Investigation Report, related to defendant's use of controlled substances and diagnosis or treatment for any mental disease, disorder or defect. United States v. Waltzer, No. 08-552 (E.D. Pa. July 20, 2010). On August 9, 2010, Judge Dalzell amended his Order and its confidentiality provisions to allow the defense's psychiatric expert, Dr. Peter Breggin ("Dr. Breggin"), to review the sentencing materials concerning Waltzer's mental health and use of controlled substances. (Def.'s Mot. to Compel, Ex. E.)

Attached to Georgiou's Second Motion for New Trial was a report by Dr. Breggin (the "Breggin Report"). In the Breggin Report, Dr. Breggin analyzed various documents relating to Waltzer's sentencing hearing, including the Lizzi Report, the Presentence Investigation Report and Waltzer's letter to the sentencing court. Dr. Breggin stated, inter alia, that "[g]iven Mr. Waltzer's bipolar disorder, cocaine abuse, alcohol abuse, and exposure to Paxil, Xanax and other psychiatric drugs in the period 1995 to 2006-2007, he would be unable to accurately testify about events involving Mr. Georgiou during that period of time. At the least[,] he is a very unreliable individual." (Breggin Report at 18, Sept. 16, 2010.)

This Court filed a sealed Memorandum and Order on November 9, 2010 ("November 9, 2010 Memorandum"), denying Georgiou's Second Motion for a New Trial and Motion for Reconsideration. Georgiou was, subsequently, sentenced by this Court on November 19, 2010, to a total of 240 months imprisonment and ordered to pay restitution in the amount of $55,832,398.00. Georgiou filed this instant Third Motion for New Trial on December 23, 2010, and also filed a Notice of Appeal in the Third Circuit Court of Appeals on December 29, 2020 appealing our denials of his prior Motions for a new trial. Georgiou has requested the Court of Appeals to stay this appeal until the instant Motion is resolved by this Court. In a letter dated March 9, 2011 to this Court, the Government wrote that "While the government believed that the most appropriate procedural course for the defendant to take was to file his Notice of Appeal only after this Court ruled so that the case would not be pending in both courts simultaneously," it recognized that Rule 4(b)(3)(B) of the Federal Rules of Appellate Procedure "may allow this Court to consider his motion." The Government stated further that "since the motion will have to be resolved on the merits at some point in time, the government requests that this Court decide the matter on the merits, rather than deciding the matter on procedural grounds." We grant such request and will decide the Motion on its merits.

II. STANDARD OF REVIEW

Federal Rule of Criminal Procedure 33 states that "[u]pon the defendant's motion, the court may vacate any judgment and grant a new trial if the interest of justice so requires." Fed. R. Crim. P. 33. "Whether to grant a Rule 33 motion lies within the district court's sound discretion." United States v. Ortiz, 182 F. Supp. 2d 443, 446 (E.D. Pa. 2000) (citation and quotation marks omitted). In evaluating a Rule 33 motion, the court does not view the evidence favorably to the government, but rather, exercises its own judgment in evaluating the government's case. United States v. Johnson, 302 F.3d 139, 150 (3d Cir. 2002). Nevertheless, "[t]he burden is on the defendant to show that a new trial ought to be granted." United States v. Clovis, No. 94-11, 1996 U.S. Dist. LEXIS 20808, at *5 (D.V.I. Feb. 12, 1996).

A court must grant a motion for new trial if it finds that there were cumulative errors during the trial that, "'when combined, so infected the jury's deliberations that they had a substantial influence on the outcome of the trial.'" United States v. Copple, 24 F.3d 535, 547 n.17 (3d Cir. 1994) (quoting United States v. Thornton, 1 F.3d 149, 156 (3d Cir. 1993)). However, even if the court "believes that the jury verdict is contrary to the weight of the evidence, it can order a new trial 'only if it believes that there is a serious danger that a miscarriage of justice has occurred -- that is, that an innocent person has been convicted.'" United States v. Silveus, 542 F.3d 993, 1004-05 (3d Cir. 2008) (quoting Johnson, 302 F.3d at 150).

III. DISCUSSION

1. Electronic Evidence

In this Motion, Georgiou outlines the series of communications between his trial counsel and the Government requesting all "Brady material, all emails, PINs, documents, and recordings that Waltzer had in his possession or provided to the government directly or indirectly involving him." (Third Motion for New Trial, Ex. C- H.) The Government responded to trial counsel that it had produced "all Brady and Giglio*fn7 material in our possession relating to all government witnesses . . . ." (Third Motion for New Trial, Ex. I.) Georgiou's current counsel, Michael Bachner, Esq. ("Bachner"), states in a Declaration that from the cell phone records that the Government produced, the defense was able to discern that the Government and Waltzer were exchanging phone calls, emails, and/or PINs and text messages, with particular frequency around the time of the sting operation. (Bachner Decl. at ¶¶ 3-4.) Georgiou asserts that, consequently, his defense team requested any additional phone-related discovery that was available, and any instructions that Waltzer received around the times he recorded conversations with him. Georgiou further maintains that his counsel "specifically pressed the government on, among other things, what it meant by all Waltzer phone records 'in its possession'; whether additional records would be forthcoming; the instructions given to Waltzer during his undercover operation; and whether Waltzer ever failed to follow instructions." (Third Motion for New Trial, Ex. K.) Georgiou asserts that in response, the Government stated that it had "provided all Waltzer phone records in our possession"; was "not aware of any Waltzer phone records that will become available"; and has "no additional discoverable information to provide concerning" the defense's request for instructions to Waltzer. (Third Motion for New Trial, Ex. K.)

Georgiou states further that in his trial counsel's final discovery letter to the Government, counsel pointed out that certain communications reflected in Waltzer's phone records still ...


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