The opinion of the court was delivered by: Judge Rambo
Presently before the court are two motions, a motion to quash the indictment (Doc. 44) and a motion to exclude a document titled "Bard Misrepresentations 4/30/10" ("Misrepresentations Document") (Doc. 46), both of which are filed by Defendant. At issue in the respective motions is the propriety of the Government's use of the Misrepresentations Document during grand jury proceedings, and the admissibility of that Document at the trial in this matter, currently scheduled for June 11, 2013. For the reasons that follow, the court will deny both motions.
Prior to the commencement of the captioned action, Bard was a defendant in a civil suit wherein the Securities and Exchange Commission ("SEC") brought securities fraud allegations against Bard and his company, Vision Specialist Group. See Docket. No. 1:09-CV-1473-WWC. The civil suit was initiated by the SEC on July 30, 2009. Bard was initially represented in that matter by Amy B. Carver, Esq., Catherine M. Recker, Esq., and Robert E. Welsh, Jr., Esq., all of the law firm Welsh & Recker, P.C. ("Welsh & Recker Attorneys"). On December 1, 2010, Dennis E. Boyle, Esq. and Megan E. Schanbacher, Esq., both of Boyle Litigation, entered their appearance on behalf of Defendant. The Welsh & Recker Attorneys subsequently withdrew their appearance on December 7, 2010.
On November 23, 2009, as the SEC investigation into Bard's activities was proceeding, Bard entered into a proffer agreement with the U.S. Attorney's Office that set forth conditions under which Bard agreed to speak with the U.S. Attorney's Office "with regard to an investigation involving mail fraud." (Doc. 45-1, p. 2 of 32.) The agreement identified the "United States" and "Robert G. Bard" as the parties to the agreement and was signed by Bruce Brandler, Assistant U.S. Attorney, Robert E. Welsh, Jr., Esq., counsel for Bard, and Bard. Specifically, the agreement proposed a detailed oral proffer from Bard in the form of an interview with the understanding that "nothing contained in the oral proffer given by Mr. Bard will be used against him in the government's case-in-chief in any criminal case other than prosecution for perjury, false statement or obstruction of justice." (Id., p. 3 of 32.)
After signing the agreement, Bard participated in an oral proffer session on November 23, 2009. In attendance at the proffer session were Bard, Bard's Counsel, and Assistant U.S. Attorney Bruce Brandler. Additionally, because the SEC had a pending civil case against Bard and Bard wished to resolve the civil matter in addition to any future criminal matter, Bard agreed to allow officials from the SEC attend and participate in the proffer session.
Following the proffer session, counsel for the SEC was unsatisfied with the extent of Bard's proffer. On April 19, 2010, the SEC sent Bard a letter indicating that "the [proffer] was wholly inadequate." (Doc. 45-1, p. 16 of 32.) The letter reiterated the SEC's interest in obtaining a pre-trial resolution and requested "fulsome responses to the questions raised in [a previously sent] January 15[, 2010] email by April 28th[, 2010]." (Id.) In response, Bard provided additional information to his counsel, Mr. Welsh, by way of email dated April 30, 2010. Mr. Welsh then reformatted the information into a table, labeled the document "Bard Misrepresentations 4/30/10," and subsequently produced it to the SEC. Despite the production of this additional information, Bard and the SEC did not settle the civil case, nor did Bard enter into a plea agreement in the criminal matter. Rather, summary judgment was granted in favor of the SEC on November 10, 2011, see SEC v. Robert Glenn Bard, 2011 U.S. Dist. LEXIS 130264 (M.D. Pa. Nov. 10, 2011), and Mr. Welsh was notified by letter dated August 26, 2010, that a criminal prosecution against Bard would ensue (Doc. 45-1, p. 25-26 of 32).
On January 19, 2012, Bard received a letter from Assistant U.S. Attorney Brandler indicating that he was the target of a federal Grand Jury investigation. (Id., p. 28-29 of 32.) On July 18, 2012, Bard was indicted and charged with securities fraud, wire fraud, mail fraud, bank fraud, investment advisor fraud, and making false statements to the FBI. One of the pieces of evidence introduced during the grand jury proceedings was the Misrepresentations Document. Defense counsel further represents that the Government has indicated its intent to use the Misrepresentations Document at trial. In the instant motions, Defendant challenges the propriety of the use of the Misrepresentations Document at the grand jury proceedings and seeks to exclude its admission at trial.
Defendant contends that the Misrepresentations Document was improperly introduced at the grand jury proceedings or, in the alternative, that it should be excluded from trial on the grounds that the document contains immunized information as a result of the proffer agreement, and the document was otherwise produced in the course of plea negotiations, and thus protected by Federal Rule of Evidence ("FRE") 410. The Government opposes both motions, arguing that FRE 410 is inapplicable in this instance. The Government further argues that, because the SEC requested the supplemental information and the SEC was not a party to the proffer agreement, the Misrepresentations Document is not protected under the terms of the proffer agreement. For the following reasons, the court agrees with the Government and will deny both motions.
A. Motion to Quash Indictment
Defendant argues that the Misrepresentations Document constituted plea negotiations and was produced by using information obtained pursuant to a proffer agreement and therefore should have been excluded from the grand jury investigation pursuant to Federal Rule of Criminal Procedure ("FRCrP") 11(f) and FRE 410(a).*fn1 Defendant further asserts that the Grand Jury has been prejudiced by the introduction of the Misrepresentations Document and the proper remedy is to quash the indictment. The court disagrees.
The court need look no further than the plain language of the proffer agreement to determine that the introduction of the Misrepresentations Document at the grand jury proceedings did not violate the terms of the proffer agreement. The proffer agreement makes clear that "it is understood that nothing contained in the oral proffer given by Mr. Bard will be used against him in the government's case-in-chief in any criminal case other than a prosecution for perjury, false statement or obstruction of justice." (Doc. 45-1, p. 3 of 32)(emphasis added.) Proffer agreements are interpreted in light of contract law principals, see United States v. Merz, 396 F. App'x 838, 841 (3d Cir. 2010), and thus the court will look at its plain terms and give effect to the parties' intent, see United States v. Hardwick, 544 F.3d 565, 577 (3d Cir. 2008). Clearly, the proffer agreement is devoid of any mention of use of proffered information before a grand jury. Rather, the agreement only restricts the use of proffered information during the government's case-in-chief during a criminal trial. Moreover, the rules dealing with exclusion of evidence at trial have no application to grand jury proceedings and thus cannot form the basis for dismissal of the indictment. See Fed. R. Evid. 1101 (d)(2) ("These rules -- except those on privilege -- do not apply to the following: . . .(2) grand-jury proceedings."); United States v. Stein, 2005 U.S. Dist. LEXIS 11141, *17 (E.D. Pa. June 8, 2005) (referring to FRE 410 and FRCrP 11(f) as an "exclusionary rule," not a privilege). Indeed, the grand jury is "an institution separate from the courts, over whose functioning the courts do not preside . . . ." United States v. Williams, 504 U.S. 36, 47 (1992).
In short, because of Defendant's erroneous reliance on FRE 410 and FRCrP 11, and because a plain reading of the proffer agreement would not exclude the use of any proffered information at a grand jury proceeding, the court will deny the motion to quash the indictment. Additionally, even if the protections in the proffer agreement did pertain to grand jury proceedings, for the reasons explained more fully below, the court finds that the proffer agreement does not ...