States Attorney Donald S. Smith on a part-time basis to assist in the preparation of the case. In December, 1961, Mr. Smith was placed in charge of the prosecution and began full time participation in the preparation of the case. The assignment of a second Assistant United States Attorney to the case was necessitated by the vast number of exhibits, the size of the files and the number of witnesses involved.
The presentation of evidence before the grand jury in the instant case commenced on January 12, 1962. The grand jury heard evidence in the case on January 12, 19, 22, 23, 29, 30, 31, February 12 and March 13. A total of thirty-one witnesses appeared and testified during this time. Pursuant to a request of their counsel, defendant Hanrahan testified on January 30 and 31 and defendant Shea testified on February 12. Various codefendants also testified, some of whom later appeared as witnesses at the trial on behalf of the government. On March 13, 1962, the grand jury voted a presentment and the indictment was returned on March 26, 1962. Between January 8, 1962 and March 28, 1962, the grand jury heard evidence in a total of 240 cases. Between January 12 and March 26, 1962, Mr. Smith and Miss Lindemann worked full time on the presentation of this case to the grand jury and the drafting of the indictment.
The Court is of the opinion that on the basis of the foregoing, and in view of all of the facts and circumstances of this case as spread upon its voluminous record, the prosecution of these defendants was not conducted with such disregard of their interests that it can be said that the delay resulted from deliberate, or negligent, actions on the part of the prosecutor. On the contrary, it is the opinion of the Court that under the circumstances of this case the delay which took place was necessary for a fair and just prosecution of the charges of mail fraud.
After the first indictment was transferred from Puerto Rico, and until October of 1960, when the government formally announced its intention to bring a second indictment, the Assistant United States Attorney assigned to the case discussed it with the Department of Justice and with the United States Attorney, researched questions of law involved, filed written motions and oppositions, and appeared in Court in matters pertaining to this case. It is apparent, however, that during the month of September, 1960, the United States was concerned with whether or not it could go to trial on the Puerto Rican indictment, and for that reason was not in a position to enter into extensive preparation for trial. Of course, during this time it would appear that the United States Attorney for the District of Puerto Rico was prepared for trial.
The defendants might contend that the dismissal of the first indictment was an attempt to relieve the government from its inability to go to trial within the time ordered by the Court on September 14, 1960. This is partially true. Certainly, the case as it then stood was fraught with difficulties, at least so far as the government was concerned, especially in regard to the language barrier and the problems it would cause in prosecuting the case in this District. The most feasible solution was to obtain a new indictment involving continental victims. However, it was not just inability to go to trial within the time specified that dictated obtaining a new indictment. Indeed, as first suggested by defense counsel, it would have been quite difficult for the government to prosecute the Puerto Rican case in the District of Columbia no matter when it went to trial.
From the time the United States decided to obtain a new indictment until January of 1961, the prosecutor was awaiting the completion of Inspector Burrows' investigation of the remaining one-hundred continental cases. This investigation apparently was more extensive than had originally been anticipated. Although it was originally estimated that this investigation would take about two weeks, the report was not finally received until some three months later, during which time Inspector Burrows retired and Inspector Turner replaced him. The Court cannot find any evidence to indicate that the delay during this period was caused by deliberate or negligent acts.
Similarly, the delay which occurred between January, 1961, and the appointment of Miss Lindemann to work upon the case does not appear to have been deliberately or negligently caused. The defendants would make much of the fact that on many occasions the Department of Justice offered assistance to the United States Attorney in this matter. The defendants relate five such offers of assistance between June, 1960, and March, 1961. Aside from the fact that these seem to be part of the routine correspondence between the United States Attorney's Office and the Department of Justice, it appears that upon occasion, suggestions and advice were sought from, and that recommendations were made by, the Department of Justice. Obviously, some person would have to try this case and he alone could familiarize himself with it. Thus, although there were at least two offers of assistance during the period of January to March, 1961, it would appear that because of the difficulties in the United States Attorney's Office, little could be done on the case in preparation for trial. In the opinion of the Court, and based upon the whole record, the actions of the United States from January through March, 1961, were neither deliberately nor negligently productive of delay. Certainly, the loss of these two and one-half to three months was unfortunate, but the Court cannot place legal blame for this loss upon the government. Its action was not unreasonable under all of the circumstances of this case.
During April, 1961, Assistant United States Attorney Alexander worked full time on the case. In May and June, as indicated, he was reassigned to the Appellate Division. The Court does not find fault with the action of the United States Attorney here. His decision appears reasonable under the circumstances, as does the failure to assign another prosecutor to the case. One must always keep in mind that this was an extremely complicated case. It would be absurd to assign someone else to it when Mr. Alexander was expected to return, even assuming that someone else was available, which was not the fact.
After Mr. Alexander announced his resignation, and after an attempt to have the case assigned to him in the Department of Justice, the record indicates that the United States Attorney, faced with a lack of experienced personnel, employed Miss Lindemann to handle the case. From the time she came on the case and until its presentation to the grand jury, there was at least one Assistant United States Attorney working on the case. For some of this time there were two prosecutors so working. Furthermore, for the majority of this time there was at least one postal inspector assigned to and working on this case. For a while there were two postal inspectors working on it. The Court finds no deliberate or negligent delay during this period.
As indicated earlier, it is the opinion of the Court that under the unusual and complicated circumstances of this most involved case, the delays which took place were necessary for fair and just prosecution of the charges. These delays were not, under the circumstances of the case, caused by arbitrary, capricious, vexatious, oppressive, deliberate or negligent conduct on the part of the government.
In its opinion, the Court of Appeals has indicated that
if * * * the court should find that the prosecution was conducted with such disregard of appellants' interests that it can be said that the delay resulted from deliberate, or at least negligent, actions on the part of the prosecutor and the prosecutor fails to show 'that the accused suffered no serious prejudice beyond that which ensued from the ordinary and inevitable delay,' then appellants' Sixth Amendment rights have been denied and the convictions must be vacated and the indictments dismissed.
While, as previously indicated, the Court is of the opinion that there was no deliberate, or negligent, delay in bringing the instant prosecution, it would appear appropriate to discuss the question of prejudice as well as that of delay.
The Sixth Amendment guarantee "is an important safeguard to prevent undue and oppressive incarceration prior to trial, to minimize anxiety and concern accompanying public accusation and to limit the possibilities that long delay will impair the ability of an accused to defend himself."
This right, then, affords a dual protection against prejudice to a defendant's defense, and against prejudice to his person.
The defendants' main contention as to damage suffered because of the delays in this case relates to their ability to defend themselves. In particular, the defendants point to the destruction of certain files of the Commercial Finance Service Corporation and the prejudice resulting from their loss. In October, or early November of 1959, the corporate files of clients in the continental United States were moved to the house of defendant Shea in Pennsylvania. Other corporate records, including the files of clients in Puerto Rico, their financial records and the files on lending institutions, had been moved to the offices of the defendants' attorney. Upon transferring the continental files to Pennsylvania, defendants Hanrahan and Shea, and co-defendants Norwood and Rossiter placed them in the basement of Mr. Shea's house, on some boards laid out on the dirt floor. In March or April of 1960, a drain was blocked and the basement of defendant Shea's house became flooded. Many of the files were soaked. The basement was full of water for four or five weeks. Apparently, defendant Shea made no effort to remove the files from the flooded area, or to dry them out or otherwise preserve them, until October, 1960. At this time, defendants Shea and Hanrahan and co-defendants Rossiter and Norwood attempted to dry out these records, and it was discovered that a number of them were destroyed.
In the opinion of this Court, any difficulties experienced by the defendants due to the loss of these records cannot be attributed to the government. It appears clear that their destruction cannot be related in any causal manner to delays incident to the prosecution of this case. When the flood occurred which caused the ultimate destruction or damage to the files stored in Pennsylvania, the case was pending in Puerto Rico and the defendants were awaiting the outcome of their motion for change of venue. Certainly, the defendants could not complain that the time between their indictment in Puerto Rico and the flood in Pennsylvania was an unreasonable one, especially in view of the fact that two months at most before the flood the defendants were not prepared for trial.
It would appear that the files stored in Pennsylvania would have been useful in defending against the Puerto Rican charges as well as in the District of Columbia. Certainly, any favorable testimony of satisfied clients would have been relevant to the allegations of a scheme to defraud. Furthermore, because the statute of limitations had not run as to many of the continental cases, common sense would indicate that these files should be preserved especially in view of the fact that the defendants knew that their activities were being investigated. On the basis of the record in this case, the Court can only conclude that these records were destroyed by an act of God, to which the carelessness of the defendants contributed, and that the government was in no way responsible for their loss.
It is also questionable whether in fact the defendants suffered substantial prejudice by the loss of these records. During the pendency of the second indictment, the defendants had available to them the names and addresses of several hundred potential witnesses. Among them were over 400 persons representing more than 400 business firms who were clients of the defendants in the continental United States; 124 persons who were clients of the defendants in Puerto Rico and the Virgin Islands; 206 persons and firms who were lenders with whom the defendants had contacts and 29 former employees of the defendants' corporation. The names and addresses of all of these potential witnesses were found in the corporate records produced by the defendants. Furthermore, the addresses of all potential witnesses were furnished to the defendants' attorney by the prosecutor during the trial in all instances where specific requests were made. It is interesting to note also that in their motion for change of venue, the defendants alleged that many of the witnesses they intended to call at the trial resided in the continental United States, and that they were without funds to bring these witnesses to Puerto Rico for trial. The names and addresses of 28 persons residing in the continental United States were referred to in this motion, none of whom were called as witnesses at the trial. It would be reasonable to expect that at least as to these last mentioned potential witnesses, the defendants would have preserved any corporate records in their possession.
In October of 1961, defendant Hanrahan gave Assistant United States Attorney Lindemann a notebook. This notebook contained certain corporate records of Commercial Finance Service Corporation and commentary by defendant Hanrahan. While in the possession of the prosecution, Postal Inspector Souder made a photostat of the notebook, which photostat became government exhibit 186 at the trial. After the return of the indictment, the notebook was returned to defendant Hanrahan. This notebook contained the names and addresses of 74 persons in sections defined as rejections and refunds. These names and addresses were available to or in the possession of the defendants at all times prior to the trial, although the corporate files for about 49 of the 74 alleged clients had apparently been destroyed in Mr. Shea's basement, and in about 22 instances there was no evidence to show that they were clients or that they had received money from the defendants. However, in preparation for the trial, the defendants attempted to contact only one of these allegedly favorable witnesses, notwithstanding the availability of all of their names and addresses. The conclusion is obvious that although the defendants were without a number of their corporate files, they were not without access to a substantial number of witnesses whose testimony they claimed would be favorable to them, but that either no attempt was made to call them or they were never contacted prior to trial. This is most interesting in light of the defendants' allegation in their motion for change of venue that many of their witnesses resided in the continental United States.
In their brief on appeal, the defendants argued that numerous witnesses were unable to recall events or to produce records. They mentioned Mr. Webb's loss of records, loss of memory by government witnesses Clark, Silverman, and Futtrup, and the loss of Mr. Burke's testimony.
At the instant hearing, the defendants again mentioned the loss of memory and records by Mr. Webb. Apparently, Mr. Webb's wife had been taken ill and was confined to a hospital in New Mexico. Her condition was quite serious and to make her think she might be getting well, Mr. Webb kept sending her his records and other things in an attempt to encourage her to retain her interest in his affairs. In the spring of 1960, Mrs. Webb was transferred from New Mexico to a hospital in New York. She died in New York in October of 1960. Mr. Webb's records were lost at about the time of the transfer of Mrs. Webb from New Mexico to New York, apparently in the spring of 1960.
Obviously, these records were lost either while the case was in Puerto Rico or soon after its transfer to the District of Columbia. It is the Court's opinion that any prejudice resulting from the loss of these records could not be attributed to delay in the prosecution of this case. No substantial delay had taken place, prior to the loss of these records, which could in any way be attributed to the government.
During the course of the remanded hearing, defendant Hanrahan, through his counsel, attempted to introduce evidence to the effect that his wife suffered a mental breakdown and that this had an effect upon him.
The Court will assume that the families of all of the defendants suffered during this prosecution and that naturally this affected the various defendants. Certainly every defendant subject to prosecution will undergo some hardship, including anxiety and loss of income. The question is always one of degree. However, this is something these defendants should have taken into consideration before embarking upon the scheme of which they stand convicted. Furthermore, it is apparent that during the entire period from the institution of the prosecution in Puerto Rico until the completion of the trial in the District of Columbia, these defendants were enlarged upon bond.
During the trial of this case, it was ascertained that one of the defendants, Francis Burke, was confined in the psychiatric ward of New Rochelle Hospital, New Rochelle, New York. Accordingly, in April of 1963, a mistrial was declared as to this defendant. Later, on November 6, 1963, Judge Youngdahl granted defendant Burke's motion to dismiss the indictment against him for lack of a speedy trial. In so doing, he indicated that Burke's precarious mental condition would have made trial oppressive. Noting that this defendant was merely one of the selling agents for the group of men behind the alleged fraud, the Court pointed out that "the interest of society in punishing this particular individual at this time is slight - especially in view of the emotional punishment which the defendant has already received."
The considerations which led to the dismissal of the indictment against defendant Burke do not require dismissing the indictment as to these defendants. There is absolutely no indication that they have suffered hardship anywhere near as severe as suffered by Burke, nor was there any proffer to that effect. Furthermore, as distinguished from the Burke case, the interest of society in punishing these defendants is by no means slight, as they were the instigators and perpetrators of the scheme to defraud.
Finally, we come to the loss of memory by the various witnesses, and the loss of defendant Burke's testimony due to his emotional breakdown. It is difficult to estimate to exactly what degree the defendants were harmed by the failure of witnesses to remember certain facts. However, upon an examination of the record, the Court is of the opinion that this damage is not of such a serious nature as to compel dismissal of the indictment. It is then the opinion of the Court that on the whole record of this case, and taking into consideration all of the circumstances, the government has demonstrated that the defendants suffered no serious prejudice as a result of the delays which did not ensue from the ordinary and inevitable delay.
For the foregoing reasons, and based upon the entire record of this case, the Court is of the opinion that the defendants have not been deprived of their Sixth Amendment right to a speedy trial. Furthermore, the Court is of the opinion that no unnecessary delay under Rule 48(b)
is present which would require the Court, in the exercise of its discretion, to dismiss the indictment.