United States v. Pelullo

Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
2-25-2005
USA v. Pelullo
Precedential or Non-Precedential: Precedential
Docket No. 02-2710
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________
Nos. 02-2710/2808/2957
__________
UNITED STATES OF AMERICA,
Appellant at No. 02-2710
v.
LEONARD A. PELULLO,
Cross-Appellant at No. 02-2808
__________
UNITED STATES OF AMERICA
v.
LEONARD A. PELULLO
Appellant at No. 02-2957
__________
On Appeal from the United States District Court
for the District of New Jersey
(Crim. No. 94-276/Civ. No. 01-124)
District Judge: Honorable Dickinson R. Debevoise
__________
Argued: September 28, 2004
___________
Before: ROTH, BARRY and GARTH, Circuit Judges
(Opinion Filed: February 25, 2005)
__________
OPINION
__________
CHRISTOPHER J. CHRISTIE
United States Attorney
GEORGE S. LEONE
Chief, Appeals Division
970 Broad Street
Newark, New Jersey 07102-2535
NORMAN GROSS (Argued)
Assistant United States Attorney
United States Attorney’s Office
Camden Federal Building and
United States Courthouse
P.O. Box 2098
Camden, New Jersey 08101-2098
Attorneys for Appellant/Cross-Appellee
United States of America
LAWRENCE S. LUSTBERG, Esq. (Argued)
THOMAS R. VALEN, Esq.
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MARK A. BERMAN, Esq.
PHILIP JAMES DEGNAN, Esq.
Gibbons, Del Deo, Dolan, Griffinger
& Vecchione
A Professional Corporation
One Riverfront Plaza
Newark, New Jersey 07102
Attorneys for Appellee/Cross-Appellant
Leonard A. Pelullo
Garth, Circuit Judge:
Leonard A. Pelullo was indicted on December 9, 1994.
He was convicted by a jury on November 8, 1996, following a
six-week trial in the United States District Court for the District
of New Jersey, of all 54 counts of the indictment, which charged
conspiracy and substantive counts to embezzle funds belonging
to an employee benefit plan and to launder the proceeds of that
embezzlement. The District Court denied a host of post-trial
motions, and imposed a prison sentence of 210 months for each
of the money-laundering counts and 60 months for the
conspiracy and embezzlement counts, to be served concurrently
with the twenty-four year prison sentence previously imposed
against Pelullo for prior racketeering and wire fraud convictions
in the District Court for the Eastern District of Pennsylvania.
The District Court also ordered Pelullo to make restitution in the
amount of $898,688 and to forfeit $3,562,987 to the United
States.
After the judgment in this case was affirmed by this
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Court on direct appeal, 185 F.3d 863 (3d Cir. 1999) (table
decision), 1 Pelullo filed a series of motions for a new trial
pursuant to Federal Rule of Criminal Procedure 33. Pelullo
essentially argued that the government failed to disclose
exculpatory evidence at the time of trial, in violation of its
obligations under Brady v. Maryland, 373 U.S. 83 (1963), thus
rendering his conviction constitutionally infirm. Additionally,
Pelullo filed a motion for collateral relief pursuant to 28 U.S.C.
§ 2255, contending, inter alia, that the District Court failed to
provide the jury with specific unanimity instructions in violation
of his rights under the Sixth Amendment.
On May 17, 2002, after consolidating the new trial
motions and the § 2255 motion, the District Court granted
Pelullo a new trial, concluding that the government had in fact
suppressed material information, in contravention of its Brady
obligations. The District Court denied Pelullo’s request for §
2255 relief, but granted a certificate of appealability with respect
to one issue: whether the Court’s failure to provide the jury
with specific unanimity instructions violated Pelullo’s Sixth
Amendment rights.
The government has appealed from the grant of a new
trial, and Pelullo has appealed from the denial of collateral
1
The Supreme Court of the United States denied
certiorari on January 10, 2000. Pelullo v. United States, 528
U.S. 1081 (2000).
-4-
relief.2
Because we conclude that the District Court erred in the
threshold suppression determination prescribed by the Brady
analysis, we will reverse the District Court’s grant of a new trial.
We also conclude that Pelullo’s challenge to the jury
instructions is procedurally barred by United States v. Frady,
456 U.S. 152, 167 (1982), and we will thus affirm the District
Court’s denial of his request for collateral relief. Accordingly,
we will direct the District Court to reinstate the judgment of
Pelullo’s conviction and his sentence. In addition, we will
remand to the District Court for resolution of the remaining
issues raised by Pelullo in his § 2255 motion,3 and direct that the
District Court, as a priority matter, give serious consideration to
vacating its Order of January 29, 2002, which had released
Pelullo on bail.
I.
2
Pelullo also filed a Notice of Appeal on June 27, 2002
from the District Court’s denial of his request for a new trial on
the alternative ground that the government had breached his
attorney-client privilege. However, he makes no argument to
that effect in his briefs. Where, as here, an appellant fails to
raise an issue in an appellate brief, even if it was listed in the
Notice of Appeal, it is deemed waived. See Ghana v. Holland,
226 F.3d 175, 180 (3d Cir. 2000).
3
See infra note 25.
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Pelullo has been the subject of federal criminal
prosecutions in the Eastern District of Pennsylvania, the Middle
District of Florida, and the District of New Jersey. He has,
moreover, been persistent in challenging his various convictions,
filing numerous notices of appeal with this Court from both the
Pennsylvania and New Jersey prosecutions.4 In this appeal,
however, which concerns only the New Jersey proceedings, it is
the government that is appealing the District Court’s grant of a
new trial based on the government’s purported failure to abide
by its Brady obligations. We are thus called upon to revisit the
parameters of prosecutorial obligations under Brady. In doing
so, and for reasons which will later become apparent, we are
4
See, e.g., United States v. Pelullo, 964 F.2d 193 (3d Cir.
1992) (“Pelullo I”) (reversing all but one of Pelullo’s wire fraud
convictions in the Eastern District of Pennsylvania due to the
erroneous admission of unauthenticated bank records); United
States v. Pelullo, 14 F.3d 881 (3d Cir. 1994) (reversing all of
Pelullo’s convictions on the ground that it was error to use prior
conviction upheld in Pelullo I as collateral estoppel to establish
predicate offense in trial before second jury); United States v.
Pelullo, 105 F.3d 117 (3d Cir. 1997) (reversing Pelullo’s wire
fraud and racketeering convictions by third jury based primarily
on government’s Brady violation in failing to disclose
exculpatory evidence); United States v. Pelullo, 173 F.3d 131
(3d Cir. 1999) (affirming Pelullo’s wire fraud and racketeering
convictions after his fourth trial in the Eastern District of
Pennsylvania); United States v. Pelullo, 185 F.3d 863 (affirming
the convictions in this case).
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mindful of the well-established principle that “the government
is not obliged under Brady to furnish a defendant with
information which he already has or, with any reasonable
diligence, he can obtain himself.” United States v. Starusko,
729 F.2d 256, 262 (3d Cir. 1984) (citation omitted).
II.
We have jurisdiction over the government’s appeal under
18 U.S.C. § 3731 and Pelullo’s appeal under 28 U.S.C. §§ 2253,
2255. Pelullo, however, raised a number of issues in his § 2255
motion for collateral relief, only one of which was certified by
the District Court for interlocutory appeal under 28 U.S.C. §
1292(b). We granted Pelullo permission to appeal under §
1292(b), thereby establishing appellate jurisdiction only as to
that one issue. We express no opinion as to the validity of
Pelullo’s remaining contentions, which will need to be
addressed in the first instance by the District Court upon
remand.
We ordinarily review a district court’s ruling on a motion
for a new trial on the basis of newly discovered evidence for
abuse of discretion. See, e.g., Government of Virgin Islands v.
Lima, 774 F.2d 1245, 1250 (3d Cir. 1985). However, where, as
here, the motion for a new trial is based on a Brady claim, which
presents questions of law as well as questions of fact, we “will
conduct a de novo review of the district court’s conclusions of
law as well as a ‘clearly erroneous’ review of any findings of
fact.” United States v. Perdomo, 929 F.2d 967, 969 (3d Cir.
1991) (citing Carter v. Rafferty, 826 F.2d 1299, 1306 (3d Cir.
1987)). Further, we exercise plenary review over the District
-7-
Court’s denial of collateral relief. United States v. Lloyd, 188
F.3d 184, 186 (3d Cir. 1999).
III.
A thorough review of the trial evidence is set forth in the
District Court’s opinion denying various post-trial claims
submitted by Pelullo before his direct appeal in this case, and
thus need not be recounted in detail here. See United States v.
Pelullo, 961 F. Supp. 736, 744-50 (D.N.J. 1997), aff’d, 185 F.3d
863. As such, we begin our background discussion by only
briefly recapitulating the salient facts of that factual summary so
as to contextualize the Brady issues raised in this appeal.
Pelullo’s indictment and subsequent conviction arose
from the government’s investigation of Pelullo’s management
of Compton Press, Inc. (“Compton Press”), the Compton Press,
Inc. Retirement Plan, and the Compton Press, Inc. Thrift Plan
(collectively, the “benefit plans”). At all relevant times, Pelullo
controlled Compton Press and, concomitantly, the benefit plans.
Through his long-time associate, David Hellhake, and a number
of other employees and associates, Pelullo systematically
diverted benefit plan assets for his own business and personal
uses. Pelullo’s modus operandi was to use a complex series of
wire transfers, which can be classified in three principal sets of
transactions.
1.
In the first of these transactions, Pelullo withdrew over
$1.15 million from various brokerage accounts owned by the
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benefit plans in order to finance an attempted corporate takeover
of DWG Corp. (a holding company for Arby’s and Royal Crown
Cola), as well as to pay for certain personal expenses. He
transferred that money to two separate accounts, hiding the true
nature of the transactions from the plan Trustees. Pelullo
transferred $750,000 to a corporate bank account of Granada
Investments, Inc., the company Pelullo used to effect the
contemplated takeover. Of these funds, some $70,000 were
subsequently filtered into various accounts owned by Pelullo
and his family members. Pelullo then transferred $400,000 to
Paribas, an investment broker retained by Pelullo to handle the
DW G takeover.
2.
The second set of transactions involved efforts to finance
the purchase of Ambassador Travel, a bankrupt company,
through a Pelullo-controlled entity called Away to Travel South
(“ATTS”). Pelullo caused $1.326 million to be transferred from
the benefit plans’ brokerage accounts, with the bulk of funds
going toward the purchase of Ambassador Travel. Much of the
money remaining after the ATTS purchase eventually filtered
down to Pelullo and his family. Pelullo accomplished this
transaction by disguising the transfers as a loan to ATTS.
3.
The third set of transactions focused on the transfer of
monies from an annuity contract, the assets of which belonged
to the Compton Press, Inc. Retirement Plan. Pelullo, through his
subordinates, terminated the contract. He then appropriated the
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proceeds from the annuity, which totaled $1.4 million, to finance
other acquisition projects and personal endeavors.
At issue in this appeal are documents obtained after trial
from two distinct sources. The first set of documents was drawn
from the hundreds of thousands of business records Pelullo had
stored in a Miami warehouse (the “warehouse documents”).
These documents had been seized by the FBI in connection with
an investigation of Pelullo (unrelated to this case) in the Middle
District of Florida (“MDFLA”). Pelullo’s lawyers claimed to
have received the documents from the United States Attorney’s
Office (“USAO”) in the MDFLA after the completion of the
trial in this case. Discovery had produced these documents in
the criminal prosecution against Pelullo in Florida.
The second set of documents were generated in a civil
lawsuit against Pelullo and others regarding Pelullo’s
defalcations from the Compton Press benefit plans. Under the
Freedom of Information Act (“FOIA”), Pelullo had obtained the
documents after the instant trial. He had obtained them from the
Pension and Welfare Benefits Administration (“PWBA”) of the
United States Department of Labor (“DOL”) (“PWBA
documents”). 5
5
Pelullo also alleged that the government had suppressed
other documents generated in two lawsuits against an attorney
named Kenneth Falk and his law firm. The District Court,
however, declined to address the Brady implications of these
documents, after granting a new trial based on the suppression
of the warehouse documents and the PWBA documents.
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As we discuss later in this opinion, this case focuses on
the threshold question of whether the government suppressed
these documents within the meaning of Brady and its progeny.
See discussion infra at 20-22. Without such suppression, there
can be no Brady violation, notwithstanding the putative
materiality of the subject documents. This suppression
determination, moreover, is a highly factual inquiry, which
requires us to carefully explore the relevant circumstances
surrounding Pelullo’s various prosecutions. We do so now,
turning first to those events relevant to the warehouse
documents.
IV.
A.
While the United States Attorney’s Office in New Jersey
was investigating the Compton Press matter, the USAO in the
MDFLA was investigating allegations of bankruptcy fraud and
other related offenses. In October of 1991, the FBI executed a
search warrant for a 2400-square foot warehouse in Miami,
which contained business records of twenty-five of Pelullo’s
companies. As Pelullo himself stated, the Florida warehouse
included “[e]very document that [he] had generated in the last
20 years.” United States v. Pelullo, 917 F. Supp. 1065, 1077
(D.N.J. 1995). These documents were in a “disorganized state
and often mislabeled,” with some of the boxes bearing numbers
Accordingly, these documents form no part of the present
appeal.
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but no further identification. Id. The FBI seized 904 boxes, 114
file cabinets, and 10 file cabinet drawers of corporate and
financial records, transported them to a secure location in
Jacksonville, Florida, identified and retained those documents
relevant to the MDFLA investigation, and returned 75,000
pounds of warehouse documents to Pelullo in September of
1992. After returning the 75,000 pounds of documents to
Pelullo, the Florida FBI agents retained roughly 160 boxes and
36 file cabinets of warehouse records.
In or around June of 1992, Kathleen O’Malley, an
Assistant United States Attorney (“AUSA”) from the MDFLA,
wrote to one of Pelullo’s lawyers, offering to transport the
75,000 pounds of released warehouse documents at the
government’s expense from Jacksonville to Miami (where
Pelullo maintained his principal place of business), and to
further transport those documents to Philadelphia (where Pelullo
had been indicted) for approximately $8,000. AUSA O’Malley
also sent the lawyers a partial index of all of the warehouse
documents, though she admitted that the index was “obsolete,”
as it failed to show all of the items seized or indicate which of
the listed items had been retained. Thereafter, the government
delivered those 75,000 pounds of documents to Pelullo.
Also in 1992, AUSA O’Malley informed Pelullo’s
lawyers that the government would retain certain other
documents that had been seized in the warehouse, but “would be
willing to provide reasonable access to Mr. Pelullo’s attorneys,
and to permit counsel to copy some or all of the documents.”
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B.
During a three-day period in 1993, DOL Special Agent
Rosario Ruffino (the principal investigator in the District of
New Jersey case) and two other agents working on the Compton
Press matter traveled to Jacksonville and conferred with the FBI
agent in charge of the Florida investigation. Florida FBI agents
assisted Agent Ruffino in identifying six boxes of documents
from the retained warehouse documents that were relevant to the
New Jersey investigation. At a Rule 104 evidentiary hearing6 on
May 16, 1995, Agent Ruffino testified that he had conducted
only a cursory review of the warehouse files in Florida “to see
if they were related to Compton Press and the profit sharing
pension plans.” Only after the six boxes of documents arrived
in Newark did Agent Ruffino review them in more detail.
On December 22, 1994, AUSA Jose P. Sierra advised
Pelullo that the government was making available for his
inspection and discovery, pursuant to Federal Rule of Criminal
Procedure 16,7 “[m]iscellaneous documents obtained pursuant
6
Federal Rule of Evidence 104(a) provides that
“[p]reliminary questions concerning the qualification of a person
to be a witness . . . or the admissibility of evidence shall be
determined by the court.”
7
Federal Rule of Criminal Procedure 16 provides:
Upon a defendant’s request, the government must
permit the defendant to inspect and to copy or
-13-
to a search warrant executed on October 23, 1991,” referring to
the retained warehouse documents. The letter further stated:
“[t]he United States is unaware of the existence of any material
within the purview of Brady v. Maryland. If I later become
aware of any other such material, I will promptly forward the
same to you.”
One week later, at a hearing on December 29, 1994,
Pelullo acknowledged that he knew that the government
possessed documents from the Florida warehouse, and that the
warehouse documents included some documents involving
Compton Press and the benefit plans. Pelullo asked that those
documents be made available for his inspection, and represented
that he would go to Jacksonville “if I have to, to take a look at
those documents.” In response, AUSA Sierra stated:
photograph books, papers, documents, data,
photographs, tangible objects, buildings or places,
or copies or portions of any of these items, if the
item is within the government's possession,
custody, or control and:
(i) the item is material to preparing the
defense;
(ii) the government intends to use the item
in its case-in-chief at trial; or
(iii) the item was obtained from or belongs
to the defendant.
Fed. R. Crim. P. 16(a)(1)(E).
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As far as documents in Jacksonville . . . I do
believe there was an investigation there and I
believe documents are in Florida. If those
documents are in the custody of the Assistant U.S.
Attorney or the agents in Florida, I will talk to
them, to see what documents bear on this case.
They may not bear on this case, and I don’t know,
your Honor, if it is appropriate for Mr. Pelullo to
use this case as a vehicle to go on a fishing
expedition as to some other investigation which is
currently going on in Florida. I can confer with
the Assistant U.S. Attorney in Florida to be sure
that that is the case. If she tells me that, in fact,
the documents that are in Jacksonville bear on her
investigation and do not bear on Compton, I
would object and would ask the Court to advise
Mr. Pelullo that . . . he is not entitled to those
documents.
Pelullo responded that “there might be other items in those files
that are relative to my case,” and “[a]ll I want is the availability
to see those files in Jacksonville to see what pertains to this case
in my defense.”
At this point, the District Court observed that “it would
appear that there are documents related to this case in Florida,”
and suggested that the prosecutor “find out and if there are,
make them available to the defendant[].” To this the
government answered:
Again it is our position that, while I believe all
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documents that were relevant in Florida we now
have and are available to Mr. Pelullo in this case.
If there are documents that we don’t have that
bear on this case, and I doubt that there are, but I
will look into it, we’ll make them available to Mr.
Pelullo.
The District Court then suggested that AUSA Sierra confer with
DOL Agent Ruffino, who was present in court. After doing so,
AUSA Sierra advised the court that Agent Ruffino intended “to
bring all relevant documents up [from Florida], so we believe
we have all of the relevant documents relevant to the Compton
case, here.”
Despite these assurances, Pellulo insisted that, even
though the government had “culled” documents from the
warehouse that pertained to “[the government’s] side of the
case,” he, Pelullo, had to review all of the warehouse documents
to find those which pertained to the defense. AUSA Sierra
agreed that Pelullo was entitled access to any such documents,
provided that they did not bear on the Florida investigation. The
District Court directed the prosecutor to identify for Pelullo
those warehouse documents that the government would
voluntarily disclose, so that Pelullo could petition the Court if he
sought additional material. The prosecution assured Pelullo and
the Court that it had previously disclosed all Brady material of
which it was aware, and would disclose any additional Brady
material of which it subsequently became aware.
After January 27, 1995, Pelullo was incarcerated at FCI
Fairton, following his conviction in the Eastern District of
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Pennsylvania. By letter dated February 28, 1995, Pelullo asked
AUSA O’Malley to release “certain original documents seized”
from the Miami warehouse in order to prepare for the trial in
this case, and to provide him with an “inventory of all original
documents seized” from the warehouse. In response, AUSA
Mark Rufolo, one of the federal prosecutors in this case,
informed Pelullo by letter dated March 2, 1995 that the six
boxes of documents already provided to Pelullo “represent all of
the documents obtained through the Florida search and seizure,
which we believe may be relevant to the case pending in the
District of New Jersey.” Mr. Rufolo advised Pelullo, however,
that he should make arrangements with the authorities in the
MDFLA “[s]hould you desire to inspect or copy additional
documents taken during the search.”
By letter addressed to Edward Plaza, Esq., on March 14,
1995, in response to Pelullo’s letter of February 28, 1995,
AUSA O’Malley again offered “to have all of the documents in
the FBI’s possession copied, at Mr. Pelullo’s expense.” She also
offered to obtain an estimate for that cost, and asked Mr. Plaza
to advise her “what arrangements Mr. Pelullo would care to
make concerning the photocopying charges.”
At a hearing on March 28, 1995, Pelullo informed the
District Court that, notwithstanding the government’s position
that the six boxes contained all relevant documents from the
warehouse, “that’s not true as to my case. I’m the one that
should determine what’s relevant or what I’m going to need to
defend myself.” Pelullo asked for a continuance of several
months “to get these documents, review them,” and otherwise
prepare for trial. He assured the District Court that he was
-17-
“prepared to tackle the task and defend myself as I have in the
past.” The District Court urged Pelullo, who at that time was
pro se, to have his stand-by lawyer, Mr. Plaza, review the
documents if Pelullo was unable to review them himself.
At that hearing, moreover, Mr. Rufolo reiterated the
government’s position that the warehouse documents were “not
relevant to this case.” However, Mr. Rufolo further stated:
If Mr. Pelullo has an interest in viewing those
documents, that he can make arrangement[s] with
the Assistant U.S. Attorney in Jacksonville. She
has responded by letter and indicated a
willingness, similar to the arrangement I made, to
have those documents copied if M r. Pelullo
agreed to pay for the documents.
In an April 27, 1995 letter to the District Court (with a
copy to Mr. Rufolo), Pelullo assured the Court that “Mr. Plaza,
Esquire is coordinating the efforts to obtain the documents
currently held by Kathleen O’Malley, AUSA in Jacksonville,
Florida.”
In November 1995, a firm trial date of February 1996
was set at Pelullo’s request. That date was subsequently
adjourned until May 1996, also at Pelullo’s request, for
additional preparation time. In December 1995, Pelullo
informed the District Court that he no longer wanted to proceed
pro se, and persuaded the Court to elevate Mr. Plaza from stand-
by counsel to full counsel.
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Mr. Plaza then moved the Court to reschedule the trial
from May 6, 1996 to September 1996. The Court conducted a
hearing on that motion on March 25, 1996. At that hearing, Mr.
Plaza explained that he needed a continuance in order to review
the large volume of documents that were pertinent to this case,
including the warehouse documents. Mr. Plaza acknowledged
that not all of the more than 900 boxes originally seized from the
Miami warehouse were relevant to this case, but adverted to the
58 boxes of documents that he had already received which
contained relevant information.
Mr. Plaza further stated that he had “never in [his]
professional life . . . come across a case with the number of
documents that are involved as in this case . . .” Indeed, he
noted that there were “thousands of documents which trace the
funds allegedly embezzled from the two Compton Press, Inc.
employee benefit plans.” These documents, Mr. Plaza said, had
“been seized during the course of a search of a warehouse
containing many thousands of documents placed there by
Pelullo.” (emphasis added). In light of the multitudinous
number of potentially relevant documents, Mr. Plaza urged the
District Court to grant the continuance, stating that, “[t]he fact
is I owe [Pelullo] a responsibility and I owe the Court a
responsibility as well. You appointed me in this case, Judge,
and I think you have to give me an opportunity to do the job
which you appointed me to do.”
Mr. Rufolo, in opposing Mr. Plaza’s request for a
continuance, informed the Court that members of the
prosecution team in this case had examined “maybe a hundred”
of the boxes in the warehouse and had brought back to Newark
-19-
“six boxes of documents” which the investigators “believe were
at least important enough to bring here.” Mr. Rufolo stated that
most of those documents would not be offered into evidence by
the government at trial. Mr. Rufolo also acknowledged that it
was “very difficult for me to predict exactly what Mr. Plaza
needs.” (emphasis added).
“[W]ith utmost reluctance,” and “against all [its] better
judgment,” the District Court granted Mr. Plaza’s continuance
request. The District Court also noted that the government’s
presentation, during the four-day Rule 104 hearing concerning
the documentary evidence it intended to present at trial,
“provided [Pelullo] with a preview of the government’s case
against him . . . [and provided Pelullo] in systematic form the
bulk, if not all of the government’s documentary evidence and
the summaries based upon that evidence.” The District Court
granted another four month continuance in order to permit Mr.
Plaza to find a proverbial “needle in a haystack someplace.”
C.
On September 10, 1996, only days before the adjourned
trial began, Herbert Beigel, Esq., was substituted as Pelullo’s
counsel. As Mr. Beigel explained to the District Court in an
affidavit dated March 23, 2000:
I also had several conversations with Assistant
United States Attorney Mark W. Rufolo
concerning the government’s production of
favorable evidence. Mr. Rufolo advised me that
the investigations and/or prosecutions of Mr.
-20-
Pelullo in the Eastern District of Pennsylvania and
the Middle District of Florida were irrelevant to
the case before the court in the District of New
Jersey.
I told Mr. Rufolo that either I or someone from
my law firm would go to Jacksonville to review
the documents seized from Mr. Pelullo’s
warehouse. Mr. Rufolo responded that he had
been assured by his agents and the Florida
prosecutor that there were no documents in
Jacksonville pertaining to Compton Press or the
charges against Mr. Pelullo in this district and that
I should not bother to go to Jacksonville.
Mr. Beigel further reported that just prior to the start of trial:
I had a conversation with Mr. Rufolo outside of
the courtroom. I specifically asked Mr. Rufolo
whether there was any favorable evidence
available in the Middle District of Florida that had
been seized in the search of Mr. Pelullo’s
warehouse. Mr. Rufolo responded that he had
spoken to the prosecutor in the Middle District of
Florida and had been told that the prosecutors in
that district were not in possession of any
documents relevant to Compton Press or the
charges against Mr. Pelullo in this district.
The government did not contest Mr. Beigel’s affidavit.
-21-
In a letter dated October 2, 1996, Mr. Beigel requested
that AUSA Rufolo “confirm that the Government does not have
any additional notes, FBI reports or other documents not already
provided that would constitute Brady or Giglio 8 material
regarding the witnesses the Government intends to call.” By
letter dated October 4, 1996, by which the government enclosed
additional documents concerning its witnesses, Mr. Rufolo
stated that the “United States is not aware of any additional
Jencks,9 Giglio, or Brady material.”
D.
Following Pelullo’s conviction on November 8, 1996 in
the District of New Jersey, the Bankruptcy Court for the Eastern
District of Pennsylvania, which presided over Pelullo’s personal
bankruptcy case, appointed Mr. Beigel as special counsel for
Pelullo to represent him on the charges brought against him in
the MDFLA. Later that month, Mr. Beigel spoke to AUSA
O’Malley in the MDFLA “to make arrangements for access to
documents in her possession in connection with the pending
indictment against Mr. Pelullo in that district.” The government
agreed to grant Lyn Merritt, a paralegal who worked for Pelullo,
access to the documents it kept in Jacksonville. Ms. Merritt
subsequently discovered the “warehouse documents” at issue in
8
Giglio v. United States, 405 U.S. 150 (1972) (material
that would impeach a government witness).
9
Jencks Act, 18 U.S.C. § 3500 (statements of any
witness).
-22-
this appeal.
E.
While the United States Attorney’s Office in New Jersey
and agents from the Labor Racketeering Office of the DOL
(which is responsible for enforcing violations of federal criminal
law) were investigating Pelullo’s actions with respect to the
benefit plans, officials of the PWBA, a civil arm of the DOL,
were monitoring a separate lawsuit, Gerardi, et al. v. Pelullo, et
al., United States District Court for the District of New Jersey,
Civ. No. 89-4069. That case, like this one, involved the
conversion of the benefit plans’ assets. The PWBA collected
documents which had been exchanged in discovery between
Pelullo and the other litigants in that civil case.
On June 16, 2000, after Pelullo filed his motion for a new
trial based on the Florida warehouse documents, the District
Court ordered the government to produce documents held in its
files at the DOL, which documents Pelullo had requested under
the Freedom of Information Act. As we have indicated, certain
of those documents are also at issue in this appeal.
As we noted earlier, the District Court on May 17, 2002
granted Pelullo a new trial, stating that the government had
violated its Brady obligations. Prior to that time, on January 29,
2002, the District Court granted Pelullo’s motion for release
from confinement pending resolution of the various post-trial
motions. Accordingly, since January 30, 2002, Pelullo has been
released on bail, and remains in that status today. See Part VII
infra (remanding for reconsideration of bail).
-23-
V.
In Brady v. Maryland, the Supreme Court held that due
process forbids a prosecutor from suppressing “evidence
favorable to an accused upon request . . . where the evidence is
material either to guilt or to punishment, irrespective of the good
faith or bad faith of the prosecution.” 373 U.S. 83, 87 (1963).
To establish a due process violation under Brady, then, “a
defendant must show that: (1) evidence was suppressed; (2) the
suppressed evidence was favorable to the defense; and (3) the
suppressed evidence was material either to guilt or to
punishment.” United States v. Dixon, 132 F.3d 192, 199 (5th
Cir. 1997) (citations omitted); see also United States v. Higgs,
713 F.2d 39, 42 (3d Cir. 1983).
Here, the District Court concluded that the government
suppressed evidence from two distinct sources–(1) the Florida
warehouse and (2) the PWBA’s files at the DOL.10 The District
Court also concluded that the suppressed evidence was both
10
The District Court did not reach the question whether
the government suppressed evidence in the files of two civil
actions against Kenneth Falk and his law firm. As we observed
in note 5, supra, matters and documents having to do with the
Kenneth Falk litigations are not before us on this appeal. We
believe, however, that our holding, and the principles upon
which it is based, have equal validity with respect to the
documents from the Kenneth Falk litigations. Accordingly, we
see no reason for the District Court to revisit this suppression
issue.
-24-
favorable to Pelullo and material, thus establishing a “serious
violation of the government’s Brady obligations.” 11 Although
the government challenges both the suppression and materiality
aspects of the District Court’s decision, we only need reach the
materiality issue upon concluding that either the warehouse
documents or the PWBA documents were suppressed by the
government within the meaning of Brady. Accordingly, we
limit our discussion to a determination of whether Brady
material was suppressed by the government. As we have stated
earlier–we hold that it was not.
A.
At the outset, our analysis is informed by certain
pragmatic considerations. We are especially mindful of the
massive amounts of documents involved in this case and the
concomitant practical difficulty faced by the government in
discovering and revealing all Brady-type material. We can
express the reality of the situation no better than the District
Court had done in denying Pelullo’s previous Brady claims
based on the non-disclosure of certain other documents:
11
The District Court did not address or rule upon the
materiality of numerous documents discussed in Pelullo’s
motion and briefed by the parties. While observing that the
government had suppressed these items, the Court explained that
it was “unnecessary to describe them all in this opinion because
the failure to have produced [the 24 items] described [in its
Opinion and Order] is sufficient to require the granting of the
motion for a new trial.”
-25-
Pelullo’s method of operation was to conduct his
multitudinous business and personal transactions
through a host of corporate and partnership
entities and through a dizzying succession of wire
transfers, both necessary and unnecessary to
accomplish an objective. As a result Pelullo was
able to conceal the nature of his undertakings and
deceive those with whom he was dealing, not only
the Employees Benefit Plans which are the
subject of this case, but also others who did
business with him. A ll of this activity generated
mountains of documents, as disclosed by the
search of the Miami warehouse. No one but
Pelullo could comprehend it all in its entirety. He
alone, an obviously highly intelligent person, was
able to keep track of it all and manipulate it to his
advantage.
****
One of the problems in this case is the almost
inexhaustible body of materials which relates to it.
There is the mountain of records which Pelullo
and his companies generated and which is
described above . . . . As a practical matter no
one, either prosecutor or defense counsel, can
ever expect to get all of this material under
control. There will always be something more
which can arguably be relevant to the issues in
this case.
-26-
Pelullo, 961 F. Supp. at 750-53 (emphasis added). As the
District Court thus recognized,12 the sheer volume of documents
12
On September 10, 2003, this Court remanded the case
to the District Court for consideration of Pelullo’s motion to
expand the record to include documents that he supposedly first
received in response to applications under the Freedom of
Information Act, 5 U.S.C. § 552 (“FOIA”). Following its
review of the FOIA documents, the District Court, in a thorough
opinion dated January 7, 2004, denied Pelullo’s motion. The
District Court observed that:
defendant’s career has consisted of engineering
one fraudulent transaction after another, looting
one company after another, deceiving one
individual or corporation after another, of which
Compton Press was only the most recent; during
the course of these activities defendant has
generated tens of thousands of documents
designed to facilitate his fraudulent conduct and
has involved countless individuals in his schemes,
some innocent victims and some knowing
participants; leaving in his wake his many
victims; defendant’s activities have generated
many criminal and civil investigations, each [of]
which generated its own mountain of documents;
no prosecutor could possibly keep track of the
array of documents generated during the course of
the many investigations of defendant . . . .
-27-
interspersed through many jurisdictions, many of which could
be relevant to any or all the various prosecutions, seriously
weakens any claim that the government suppressed evidence.
This holds true for both the warehouse documents and the
PWBA documents. As Pelullo himself had admitted when
seeking a trial continuance, “I’m the one that should determine
The District Court concluded that this Court’s intervening
decision in United States v. Merlino, 349 F.3d 144 (3d Cir.
2003), may have raised the question whether, in its opinion
granting Pelullo a new trial on Brady grounds, it had imposed an
unreasonable burden on the government. Interestingly, the
District Court had:
considered granting the motion [to supplement the
record], not because [the FOIA documents]
support defendant’s motion for a new trial on
Brady grounds, but because they might provide
grounds for excusing any Brady violations which
have been found to have taken place . . . It would
be a strange outcome if a defendant whose many
fraudulent schemes created a number of
mountainous piles of documents in several
jurisdictions, could escape conviction because, as
a practical matter, no United States Attorney’s
Office prosecuting one of the frauds could put its
hands on every single possibly relevant document.
United States v. Pelullo, Crim. No. 94-276, Civ. No. 01-124,
Supplemental Appx. SA2 at 4, 17, 24 (D.N.J. Jan. 7, 2004).
-28-
what’s relevant or what I’m going to need to defend myself.”
B.
We proceed to examine the purported suppression of the
warehouse documents. Our analysis focuses on three
overarching considerations: (1) the respective knowledge of the
parties; (2) Pelullo’s access to the warehouse documents; and (3)
the government’s representations. We address each of these
factors seriatim.
1.
There is no dispute here that Pelullo had knowledge of
the existence of the warehouse documents. As we previously
indicated, these were Pelullo’s own documents, generated during
a twenty-year span involving virtually all of Pelullo’s myriad
companies and business ventures. Pelullo was well-aware that
the warehouse documents were in Florida, and that members of
the New Jersey prosecution team in this case did not actually
possess those documents. Additionally, Pelullo received 75,000
pounds of the warehouse documents long before trial, thereby
providing him with additional insight about what he could
expect to find from a thorough review of the documents that the
government had retained. This, therefore, is not a situation
where the government failed to disclose documents unknown to
the defense, about which the government had superior
-29-
knowledge.13
What is more, there is no indication that the government
had knowledge about the exculpatory nature of the warehouse
documents, which distances this case from Banks v. Dretke, 124
S. Ct. 1256 (2004) and Strickler v. Greene, 527 U.S. 263 (1999).
In both these cases, which are heavily relied upon by Pelullo, the
prosecution team had actual knowledge during trial of
information that contradicted the trial testimony of crucial
prosecution witnesses. Banks, 124 S. Ct. at 1264-65, 1273-74;
Strickler, 527 U.S. at 273-74. Also in both cases, the
prosecution had represented to the defense that it had provided
access to all information possessed by the prosecution, knowing
that the files that were made available to the defense did not
contain the crucial impeachment information. Banks, 124 S. Ct.
at 1273; Strickler, 527 U.S. at 276, 282. Unlike the state court
prosecutors in Banks and Strickler, here, the government was
13
See United States v. Dixon, 132 F.3d at 199
(government did not suppress appellant’s financial records,
which the government seized while executing a search warrant,
because information about appellant’s own finances was known
or “should have been known” to him through exercise of due
diligence); United States v. Aubin, 87 F.3d 141, 148 (5th Cir.
1996) (government did not suppress information regarding loans
for which appellant or companies he controlled was borrower,
since “this is information about which [appellant] should have
known [through the exercise of due diligence]”).
-30-
unaware of any material information in those documents. 14 See
United States v. Joseph, 996 F.2d 36, 39 (3d Cir. 1993) (noting
that the more difficult Brady situation is where certain
exculpatory evidence is available to the prosecution but not
within its actual knowledge).
2.
A further consideration here, which is perhaps of even
greater import, is that the government repeatedly made the
warehouse documents available to Pelullo and his attorneys for
inspection and copying.15 Brady and its progeny permit the
14
The District Court stated that it found “no evidence that
the government knowingly used false evidence.”
15
Pelullo asserts that the government knew that he could
not afford to pay the expenses for the warehouse documents. He
thus argues that offering to provide an incarcerated and
impecunious defendant with copies of thousands of documents
at his expense hardly satisfies the government’s Brady
obligations. This argument is wholly unpersuasive. As the
government points out, Pelullo could have sought
reimbursement under the Criminal Justice Act for the expenses
of obtaining the documents. See United States v. Feldman, 788
F.2d 625, 626 (9th Cir. 1986). In addition, Pelullo never
informed the government or the District Court that he could not
obtain the documents due to financial constraints, thus rendering
this argument on appeal unavailable. In any event, his putative
financial inability to obtain copies of the warehouse documents
-31-
government to make information within its control available for
inspection by the defense, and impose no additional duty on the
prosecution team members to ferret out any potentially defense-
favorable information from materials that are so disclosed. See
United States v. Mhahat, 106 F.3d 89, 94 (5th Cir. 1997) (where
government gave defense access to 500,000 pages of
documents, no obligation arose under Brady to “point the
defense to specific documents within a larger mass of material
that it has already turned over”); United States v. Parks, 100
F.3d 1300, 1307 (7th Cir. 1996) (“Brady [does not] require[] the
Government to carry the burden of transcribing [65 hours of
intercepted conversations]” because the defendants “had been
given the same opportunity as the government to discover the
identified documents” and “information the defendants seek is
available to them through the exercise of reasonable diligence”)
(internal quotations and citation omitted); see also United States
v. Mulderig, 120 F.3d 534, 541 (5th Cir. 1997).
As in Mmahat and Parks, the government in this case
made the warehouse documents available to the defense, without
specifying any particular documents that were helpful to the
defense, something Brady does not obligate it to do. In such
circumstances, the burden is on the defendant to exercise
does not explain why he (or his attorney) did not accept the
government’s alternative offer in making the documents
available for an on-site inspection.
-32-
reasonable diligence.16
3.
Conceptually, we find ourselves at the intersection
between two particular branches of the Brady doctrine. Our
jurisprudence has made clear that Brady does not compel the
government “‘to furnish a defendant with information which he
already has or, with any reasonable diligence, he can obtain
himself.’” Starusko, 729 F.2d at 262 (quoting United States v.
Campagnuolo, 592 F.2d 852, 861 (5th Cir. 1979)); see also
United States v. Dansker, 565 F.2d 1262, 1265 (3d Cir. 1977).
It is equally clear, however, that defense counsel’s knowledge
of, and access to, evidence may be effectively nullified when a
prosecutor misleads the defense into believing the evidence will
not be favorable to the defendant. See, e.g., United States v.
Shaffer, 789 F.2d 682, 690 (9th Cir. 1986) (finding suppression
where government appraised defense counsel of the existence of
certain tapes but also stated that those tapes would be of “no
value”); Hughes v. Hopper, 629 F.2d 1036, 1039 (5th Cir.
1980). At issue, then, is whether the representations made by
the various govnernment attorneys compel a finding of
16
It bears repeating that the government had returned
75,000 pounds of documents to Pelullo. These documents were
in his possession throughout the relevant time period. Pelullo’s
Brady argument pertains instead to the roughly 160 boxes and
36 file cabinets of warehouse records which were retained by
the government, but which were available to Pelullo for his
inspection.
-33-
suppression, where every other pertinent consideration–i.e., (1)
the mountainous piles of documents, which belonged to Pelullo,
(2) the government’s lack of specific knowledge about the
existence of favorable, material evidence, and (3) defendant’s
extended access to, and purported knowledge of, particular
documents–weighs against such a finding.
Pelullo argues that the Brady doctrine is premised upon
the appropriateness of the court and defense counsel relying
upon the government’s representations. The difficulty with
Pelullo’s argument is that there does not appear to be any such
reliance in this case, notwithstanding the government’s (in many
instances, equivocal) assurances. With respect to the pre-1996
representations, the record establishes that neither Pelullo nor
Mr. Plaza relied on the government’s statements that the
warehouse documents contained no relevant documents. To the
contrary, while acting pro se, Pelullo emphasized that:
[t]hey have taken the position that they have six
boxes of material and that is all that’s relevant to
the case. That may be true as to their case, but
that’s not true as to my case. I’m the one that
should determine what’s relevant or what I’m
going to need to defend myself.
At that time, Pelullo also asked for a continuance of several
months “to get [the warehouse documents], review them,” and
otherwise prepare for trial. That was Pelullo’s position for the
twelve months between December 1994 and December 1995
while he was proceeding pro se, with Mr. Plaza serving as
stand-by counsel.
-34-
During this relevant time span, the government’s last
representation occurred in March 28, 1995, when M r. Rufolo
reiterated the government’s position that the warehouse
documents were “not relevant to this case.” This representation,
however, was followed by an April 27, 1995 letter from Pelullo
to the District Court requesting a continuance to obtain and
review documents. Pelullo assured the court that “Mr. Plaza,
Esquire is coordinating the efforts to obtain the documents
currently held by Kathleen O’Malley, AUSA in Jacksonville,
Florida.” It follows that any assurances by the government
occurring before this April 27, 1995 letter could not have
induced reliance by Pelullo.
In addition, after Mr. Plaza was elevated from stand-by
to full counsel in December 1995, he made it clear that he was
not relying upon the six boxes of documents produced by the
government. Given Mr. Plaza’s successful request to further
delay the trial in order to permit him to review the multitudinous
documents possibly relevant to this case, including the
warehouse documents, any claim of reliance based on any prior
representations by the government must be rejected as fanciful. 17
17
Pelullo argues that the transcript does not support the
government’s position that Mr. Plaza indicated that he would go
to Florida to review the warehouse documents. Rather,
according to Pelullo, it shows that Mr. Plaza intended to review
18 boxes of documents that had already been provided to him by
the government, more than forty boxes that were already in Mr.
Plaza’s possession and which Mr. Pelullo had culled from the
75,000 pounds of documents returned after the warehouse
-35-
The District Court’s finding to the contrary is contradicted by
the record, and must be held to be clearly erroneous. However,
this does not end the inquiry.
Pelullo also relies on certain post-1996 statements by the
government. Mr. Plaza represented Pelullo from December
1995 until the eve of trial in September of 1996, when Pelullo
convinced the District Court to replace him with Mr. Beigel as
court-appointed counsel, with the assurance that the
appointment of Mr. Beigel would not delay the trial. Even after
Mr. Beigel was appointed, Pelullo retained the services of M r.
Plaza, whom the District Court directed to “remain as co-
counsel for as long as Pelullo and Mr. Beigel thought he could
be helpful.” Pelullo, 961 F. Supp. at 760. Pelullo has submitted
an affidavit from Beigel, alleging that he relied upon certain
representations by the government that no additional Brady
material existed in Jacksonville. As we have indicated, the
government has not contested this affidavit.
However, a more careful look reveals that, as a practical
matter, there could not be any genuine reliance by Pelullo on the
government’s statements, as there was no realistic opportunity
for Mr. Beigel to review the warehouse documents during the
two-week window Pelullo had left him to prepare for trial. In
search, and various documents he hoped to obtain from third
parties. Whether or not Mr. Plaza intended to review the
warehouse documents in particular, given the history of the
parties’ correspondence about the warehouse documents,
Pelullo’s contention is neither persuasive nor convincing.
-36-
any event, all this merely begs the question why Pelullo and
Plaza failed to review the warehouse documents during the
twenty-one month span between December 1994, when Pelullo
was indicted, and September 1996, when the trial began, as they
repeatedly assured the District Court and the government that
they would.
As the government argues, it was the twenty-one months
of defense inactivity and the two-week window that Pelullo had
left Mr. Beigel to prepare for trial, not any statements by the
prosecution, that prevented the defense from examining the
warehouse documents. The fact of the matter is that the
government’s post-1996 representations did not eliminate its
previous offers to make the warehouse documents available to
the defense, and in no way absolved the defense of its failure to
exercise due diligence during the many months between
indictment and trial.
We find the reasoning in two cases from the Seventh and
Fifth Circuits instructive here. First, in United States v. Senn,
129 F.3d 886 (7th Cir. 1997), the Seventh Circuit held that the
failure to disclose the government key witness’s entire criminal
record was not a Brady violation, notwithstanding the defense
team’s alleged reliance on that disclosure as complete, where
defense counsel had reason to know that the government’s
disclosure was not exhaustive. Id. at 893. The Court also noted
that the ease with which the defense eventually obtained the file
in question defeated their claim of suppression. Id. at 892-93.
In this case, too, the ease with which Pelullo discovered
the relevant warehouse documents after trial would seem to
-37-
defeat any claim of suppression, to say nothing with respect to
his purported knowledge of the documents and their contents.
Furthermore, Pelullo had reason to know, as did the defense in
Senn, and as he more than once stated, that the government’s
disclosure (i.e., the six boxes of warehouse documents) was not
exhaustive as to his side of the case.
Second, in United States v. Mulderig, 120 F.3d 534, the
government gave the defense access to 500,000 pages of
documents relating to the case. Id. at 541. Among the
documents were two board resolutions that purportedly gave the
officers the authority to negotiate and approve the loans for
which they were prosecuted. The defense argued that the
government violated Brady by (1) failing to designate two
alleged ly excu lpatory reso lutions; (2) affirmatively
misrepresenting the resolutions; and (3) failing to correct false
testimony as to the authority of the officers to negotiate the final
terms of the loans. Id. The Fifth Circuit rejected the Brady
claim, noting that Mulderig “could not have been unaware of the
alleged existence of the resolutions.” Id.18 The Court thus
concluded that “the nondiscovery of the resolutions was due to
18
See also Mmahat, 106 F.3d at 94-95 (same); United
States v. Runyan, 290 F.3d 223, 245-46 (5th Cir. 2002) (where
government afforded the defense full access to hard drive of
seized computer, the government, in not identifying information
helpful to the defense contained in the hard drive, did not
suppress that information, as Brady does not require “the
Government, rather than the defense, to turn on the computer
and examine the images contained therein”).
-38-
Mulderig’s lack of diligence rather than any affirmative
government misbehavior.” Id.
Both cases–Senn and Mulderig–stand for the proposition
that defense knowledge of, or access to, purportedly exculpatory
material is potentially fatal to a Brady claim, even where there
might be some showing of governmental impropriety. Like the
defendants in Senn and Mulderig, Pelullo had sufficient access
to the information at issue, notwithstanding any statements of
the government, which in any event were either discounted by
the defense or were made so close to trial as to have no practical
import.19
19
Pelullo’s attempts to distinguish Senn and Mulderig are
unpersuasive. He argues, for instance, that in Senn the
government had “a month before trial . . . informed the
defendants that it had not contacted all local police departments,
that the defendants should do so themselves, and that the
discovery materials it had were extensive but not exhaustive.”
129 F.3d at 892. Pelullo thus appears to ignore his own
statements in this case, supported by the reality of the situation,
that only he could decipher the importance of the warehouse
documents to his side of the case. More importantly, the
warehouse documents belonged to Pelullo, which renders the
governmental conduct in this case even less blameworthy than
that of the government in Senn.
Pelullo attempts to distinguish Mulderig by arguing that
the prosecution there produced the documents in question, in
contrast to this case, where the prosecution concealed them in
-39-
In sum, the following factors militate against a finding of
suppression of the warehouse documents: (1) the massive
amount of documents, which belonged to Pelullo; (2) the
government’s lack of knowledge as to the exculpatory nature of
the material contained in the warehouse documents; (3) the
defense knowledge of, and access to, the subject documents.
The government’s representations–the only factor weighing in
favor of suppression–do not, under the circumstances, negate
Pelullo’s duty to exercise reasonable diligence.
We hold that the District Court clearly erred in its
findings of fact and that there was no suppression of the
warehouse documents.
C.
The District Court also found that the government
suppressed the PWBA documents, on the ground that the
government’s Brady obligations extended to the content of those
the Florida warehouse. This argument entirely misses the
critical distinguishing fact between the two cases–the
government in Mulderig had specific knowledge about the
location and exculpatory nature of the board resolutions but
nonetheless failed to designate the resolutions as exculpatory in
response to a Brady request. Because the government in this
case had no knowledge of the exculpatory material contained in
the warehouse documents, its affirmative representations are far
less susceptible of reliance than the governmental silence found
insufficient to support a Brady violation in Mulderig.
-40-
files because “this material was in the files of the same agency,
the DOL, that prepared the present case for trial.” Because we
reject the District Court’s conclusion that the PWBA should be
considered part of the “prosecution team,” we conclude the
government did not suppress the PW BA documents.
Brady places an affirmative obligation on prosecutors “to
learn of any favorable evidence known to the others acting on
the government’s behalf in the case.” Kyles v. Whitley, 514 U.S.
419, 437 (1995). That said, “Kyles cannot ‘be read as imposing
a duty on the prosecutor’s office to learn of information
possessed by other government agencies that have no
involvement in the investigation or prosecution at issue.’”
United States v. Merlino, 349 F.3d 144, 154 (3d Cir. 2003)
(quoting United States v. Morris, 80 F.3d 1151, 1169 (7th Cir.
1996) and citing United States v. Locascio, 6 F.3d 924, 949-50
(2d Cir. 1993)). Here, there is no question that certain DOL
agents were integral members of the prosecution team. Pelullo
argues that this compels the conclusion that the PWBA (as part
of the DOL) was part of the prosecution team as well, thus
extending the government’s Brady obligations to information
possessed by the PWBA. The government argues that the
prosecution team should not be defined to include the entire
DOL, a massive federal agency. The question presented, then,
is whether the PWBA officials who possessed the documents at
issue were members of the “prosecution team” in this case.20
20
Stated somewhat differently, the question is whether
the prosecution should be charged with “constructive
knowledge”of the evidence held by the PWBA. See United
-41-
We addressed an analogous situation on direct appeal in
this very case. There, Pelullo contended that the government
took an inconsistent position in a forfeiture proceeding in the
Eastern District of Pennsylvania that was being held during
Pelullo’s criminal trial in New Jersey. In an unpublished
opinion, we rejected Pelullo’s Brady claim based on the
foregoing, stating that there was no indication that the
government affirmatively withheld the materials, as there was
nothing to suggest that the New Jersey prosecutors were even
aware of the Eastern District of Pennsylvania prosecutors’
litigating position in the forfeiture proceeding. See United
States v. Pelullo, 185 F.3d 863 (affirming Pelullo’s judgment of
conviction and sentence). We went on to hold that because the
“government is not under an obligation to obtain and disclose all
information in the possession of other arms of the government
that are not involved in the particular prosecution,” the
prosecution was under no obligation to “ferret out evidence
from another pending proceeding with a tenuous connection to
the prosecution.” Id.
Similarly, in Merlino, the prosecution, pursuant to
defendants’ request, served the Bureau of Prisons (“BOP”) with
a series of subpoenas, directing it to preserve and make copies
of all tape-recorded conversations of certain government
witnesses. 349 F.3d at 153. Subsequently, the BOP forwarded
States v. Perdomo, 929 F.2d 967, 970 (3d Cir. 1991) (holding
that “the prosecution is obligated to produce certain evidence
actually or constructively in its possession or accessible to it”).
-42-
to the government roughly 300 tapes, which the government
listened to, concluding that they contained no Brady material.
Id. At issue in the case was whether the government was
obligated under Brady to review over 2,000 additional tapes
held by the BOP. These tapes were never produced to, or
listened to, by any member of the prosecution team. Id. This
Court concluded that, in light of the government’s representation
that none of the tapes it had reviewed contained Brady material,
the defense requests would have sent the prosecution on an
“open-ended fishing expedition.” Id. at 154 (citation omitted).
Our conclusion here is further supported by the Second
Circuit’s decision in United States v. Locascio, which this Court
cited with approval in Merlino and on direct appeal in this case.
In Locascio, the Second Circuit held that the government did not
suppress impeaching information about a government witness
in an organized crime prosecution in which the FBI was the lead
investigatory agency. The impeaching information was
memorialized in a report prepared by FBI agents who were not
members of the Locascio prosecution team, but who were
investigating other organized criminal activity involving the
same witness. 6 F.3d at 949-50; see also United States v.
Avellino, 136 F.3d 249, 255 (2d Cir. 1998) (“[T]he imposition
of an unlimited duty on a prosecutor to inquire of other offices
not working with the prosecutor’s office on the case in question
would inappropriately require us to adopt a ‘monolithic view of
government’ that would ‘condemn the prosecution of criminal
cases to a state of paralysis.’”) (citation omitted); United States
v. Quinn, 445 F.2d 940, 944 (2d Cir. 1971) (refusing to impute
-43-
knowledge of Florida prosecutor to an AUSA in New York).21
Applying the general principle set forth in these
cases–that the prosecution is only obligated to disclose
information known to others acting on the government’s behalf
in a particular case–we conclude that the PWBA was not a
21
In a similar vein, the Eleventh Circuit has held that the
scope of a prosecutor’s authority properly defines the scope of
the prosecutor’s disclosure obligations. Thus, in United States
v. Meros, 866 F.2d 1304 (11th Cir. 1989), the Court of Appeals
held that a prosecutor in the Middle District of Florida did not
“possess” favorable information known by prosecutors in the
Northern District of Georgia and the Eastern District of
Pennsylvania. Id. at 1309. The Court stated, “[a] prosecutor has
no duty to undertake a fishing expedition in other jurisdictions
in an effort to find potentially impeaching evidence every time
a criminal defendant makes a Brady request for information
regarding a government witness. Id. Similarly, in Moon v.
Head, 285 F.3d 1301 (11th Cir. 2002), the defendant based his
Brady claim on certain evidence made available to him post trial
regarding his alleged murder conviction. One of the State’s
witnesses at the sentencing phase–an agent with the Tennessee
Bureau of Investigation (“TBI”)– failed to reveal certain key
pieces of information about the killing. The Court of Appeals,
in denying the Brady claim, refused to impute to the Georgia
prosecutor the evidence possessed by the TBI, as the Georgia
and Tennessee agencies shared no resources or labor and the
TBI agents were not under the direction or supervision of the
Georgia officials. Id. at 1310.
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member of the prosecution team. There is no indication that the
prosecution and PWBA engaged in a joint investigation or
otherwise shared labor and resources. Cf. United States v.
Antone, 603 F.2d 566, 569-70 (5th Cir. 1979) (holding that
information possessed by state investigator should be imputed
to federal prosecutor because “the two governments, state and
federal, pooled their investigative energies [to prosecute the
defendants]”). Nor is there any indication that the prosecution
had any sort of control over the PWBA officials who were
collecting documents. And Pelullo’s arguments to the contrary
notwithstanding, that other agents in the DOL participated in
this investigation does not mean that the entire DOL is properly
considered part of the prosecution team. Indeed, in Locascio,
information was not attributable to the prosecution team, even
though it was known to investigators drawn from the same
agency as members of the prosecution team.22 Likewise here,
22
In United States v. Wood, 57 F.3d 733 (9th Cir. 1995),
relied on by Pelullo, the Ninth Circuit held “only that under
Brady the agency charged with administration of the statute,
which has consulted with the prosecutor in the steps leading to
prosecution, is to be considered as part of the prosecution in
determining what information must be made available to the
defendant charged with violation of the statute.” Id. at 737; see
also United States v. Bhutani, 175 F.3d 572, 577 (7th Cir. 1999)
(same). Both courts found the FDA part of the prosecution team
because it was the “agency interested in the prosecution.” 57
F.3d at 737; see also 175 F.3d at 577. Here, by contrast, there
is nothing to suggest that the civil PWBA investigators had a
similar level of involvement in the criminal prosecution, and
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the PWBA civil investigators who possessed the documents at
issue played no role in this criminal case.23
thus the limited holdings of Wood and Bhutani, do not apply.
23
Because the PWBA was not a part of the prosecution
team, the prosecution never had “constructive possession” of the
Brady materials. In United States v. Joseph, we construed
“constructive possession” to mean “that although a prosecutor
has no actual knowledge, he should nevertheless have known
that the material at issue was in existence.” 996 F.2d at 39. We
there held that “where a prosecutor has no actual knowledge or
cause to know of the existence of Brady material in a file
unrelated to the case under prosecution, a defendant, in order to
trigger an examination of such unrelated files, must make a
specific request for that information.” Id. at 41. Here, there is
no dispute that Pelullo never made a specific request for the
PWBA documents, making this case somewhat similar to
Joseph. But whereas Joseph concerned “unrelated” files, this
case arguably involves related files. While that distinction
certainly distances this case from Joseph, it does not compel the
conclusion (advanced by Pelullo) that Joseph has no bearing on
this case. Joseph concerned a prosecutor’s duty to search his
own unrelated files for exculpatory material. This case concerns
a prosecutor’s duty to search related files maintained by
different offices or branches of the government. Given that the
PWBA was not a member of the prosecution team, it would be
accurate to say that the prosecution never had “constructive
possession” of the PWBA documents.
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We hold that the government did not suppress the PWBA
documents and that to the extent that findings of the District
Court were at issue, such findings were clearly erroneous.24
D.
For the foregoing reasons, we hold that the District Court
erred in concluding that the government suppressed the
warehouse and PWBA documents. We therefore need not
determine whether that information is favorable to the defense
and material, or whether “there is a reasonable probability that,
had the evidence been disclosed to the defense, the result of the
proceeding would have been different.” Kyles, 514 U.S. at 433
(quoting United States v. Bagley, 473 U.S. 667, 682 (1985))
(internal quotations omitted).
VI.
Lastly, we consider Pelullo’s appeal from the denial of
24
We note that, even if the prosecution is charged with
knowledge, either actual or constructive, of the PWBA
documents, Pelullo’s Brady claim would still fail if he could
have obtained the information through the exercise of
reasonable diligence. While the public nature of these
documents, generated as they were during the course of two
civil actions, suggests that Pelullo had sufficient access to the
documents to defeat his Brady claim, we need not reach that
issue in light of our holding here.
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collateral relief.25 We must decide whether the “cause and
actual prejudice” test articulated by the Supreme Court in United
States v. Frady, 456 U.S. 152 (1982), should apply to this
appeal, thus procedurally barring Pelullo’s collateral challenge
to the jury instructions.
25
Pelullo filed a motion under 28 U.S.C. § 2255
advancing four grounds to vacate, set aside or correct his
sentence, namely: (1) the court failed to provide the jury with
specific jury unanimity instructions in violation of his Sixth
Amendment rights; (2) the court misapplied the sentencing
guidelines in that it sentenced defendant pursuant to U.S.S.G. §
2S1.1, which is applicable to money laundering, whereas it
should have sentenced him pursuant to the embezzlement
guideline, which would have produced a shorter sentence; (3)
the court improperly amended defendant’s judgment of
conviction to include forfeiture provisions; and (4) the
government failed to present sufficient evidence to support the
convictions for money laundering.
After noting that the second and third grounds could be
dealt with later if defendant is convicted after a new trial and
that the fourth ground was already addressed and rejected on
defendant’s motion for a judgment of acquittal, the District
Court determined that the first ground, while presenting serious
questions, should be rejected pursuant to United States v. Frady,
456 U.S. 152, 167 (1982). The District Court thus dismissed the
petition, though it granted a certificate of appealability with
respect to the jury instruction issue. As we have stated, this
appeal is thus limited to that one issue.
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A.
Count 1 of the indictment charged a two-part conspiracy
to embezzle funds and to engage in money laundering. The jury
charge relating to Count 1 did not require that there be
unanimity either as to the object of the conspiracy or as to the
particular schemes alleged.26 Counts 2-12 charged
embezzlement, and Counts 13-54 charged money laundering.
Each of those counts incorporated Count 1 by reference.
Further, the jury charge applicable to the embezzlement offenses
did not require unanimity as to whether Pelullo engaged in a)
embezzling, b) stealing, c) abstracting, or d) converting pension
funds. 27 The charge applicable to the money laundering counts
26
With respect to Count 1, the District Court charged:
Count I lists two offenses as the object of the
Section 371 conspiracy–theft or embezzlement of
the Compton Press pension funds and money
laundering. You need not find that the defendant
conspired to commit both of these offenses to find
the defendant guilty of the conspiracy charged in
Count 1. In order to find the defendant guilty of
Count 1, you must, however, unanimously agree
that the defendant conspired to commit at least
one of the offenses charged as an object of the
conspiracy.
27
The charge relating to the embezzlement counts stated:
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did not require unanimity as to whether Pelullo engaged in the
financial transaction a) with the intent to promote the carrying
on of the specified unlawful activity or b) with knowledge that
the financial transaction was designed in whole or in part to
conceal or disguise the nature, the location, the source, the
ownership, or the control of the proceeds of the specified
unlawful activity. 28
As you can see, the statutory language of Section
664 . . . covers a number of different sorts of
takings. However, the United States is not
required to prove all four means, which I have
just defined for you, were actually employed by
the defendant. Rather, the government’s proof
need only establish beyond a reasonable doubt
that the defendant unlawfully and willfully either
embezzled, or stole, or abstracted, or converted to
his own use or the use of another the money or
property of the Compton Press Employees’ Profit
Sharing Retirement Plan or the Compton Press
Employees’ Thrift Plan, as charged in the
indictment.
28
The charge relating to the laundering counts stated:
[T]o find the defendant guilty of money
laundering, you must find that the government has
proven . . . beyond a reasonable doubt, [among
other things], [t]hat the defendant engaged in the
financial transaction with either the intent to
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In his § 2255 motion, Pelullo argued that the District
Court erred in failing to specifically instruct that the jurors were
required to agree unanimously upon which of the offenses
defendant conspired to commit (Count 1); which scheme he
engaged in to embezzle from the pension plans (Counts 2-12);
and which unlawful activity was the predicate act for the money
laundering charges or which type of money laundering
method–promotion or concealment–he employed (Counts 13-
54).
In deciding the § 2255 motion, the District Court
concluded that it had in fact erred in its instructions to the jury
as to the conspiracy count (Count 1), and that the error was not
harmless because “the jury could have arrived at a non-
unanimous verdict in violation of the Sixth Amendment.”
Nevertheless, the District Court denied Pelullo’s request for
collateral relief, concluding that he had not shown the requisite
cause to properly raise the error for the first time on collateral
attack.29 Pelullo now appeals that decision, alleging that the
promote the carrying on of the specified unlawful
activity, or knowledge that the financial
transaction was designed in whole or in part to
conceal or disguise the nature, the location, the
source, the ownership, or the control of the
proceeds of the specified unlawful activity.
29
The District Court further concluded that there was no
risk of jury confusion and therefore no need for the unanimity
charge as to Counts 2 through 54.
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District Court’s failure to provide a specific unanimity charge
was constitutionally defective.
B.
The scope of our review is shaped by whether Pelullo
procedurally defaulted on this issue, both at trial and on direct
appeal. In United States v. Frady, the Supreme Court held that
the proper standard of review for collateral attacks on trial
errors, including jury instructions where no contemporaneous
objection was made, is the “cause and actual prejudice”
standard. 456 U.S. at 167. Under that standard, “to obtain
collateral relief based on trial errors to which no
contemporaneous objection was made, a convicted defendant
must show both (1) ‘cause’ excusing his double procedural
default, and (2) ‘actual prejudice’ resulting from the errors of
which he complains.” Id. at 167-68. Applying Frady to the
present case, the District Court concluded that, although Pelullo
might have suffered actual prejudice from an erroneous jury
instruction provided as to Count 1, he had failed to demonstrate
“cause” for his procedural default at trial and again on direct
appeal, thus defeating his claim for collateral relief.
Pelullo argues, however, that the “cause and actual
prejudice” standard should not apply to his request for relief.
He argues that his jury charge claims should be reviewed de
novo because he effectively raised and preserved the issue at
trial by requesting a specific unanimity charge. Alternatively, he
contends that we should review his request under a plain error
standard because he attempted to raise this issue on direct
appeal. We address each contention below.
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1.
Pelullo contends that he “raised this matter in the district
court” because he submitted a proposed instruction that the jury
must unanimously agree on which of the overt acts identified in
Count 1 of the indictment (conspiracy) were committed. We
disagree.
“A party generally may not assign error to a jury
instruction if he fails to object before the jury retires or to
‘stat[e] distinctly the matter to which that party objects and the
grounds of the objection’.” Jones v. United States, 527 U.S. 373,
387 (1999) (citation omitted). In Jones, the Supreme Court held
that “a request for an instruction before the jury retires [does
not] preserve an objection to the instruction actually given by
the court,” as “[s]uch a rule would contradict Rule 30's mandate
that a party state distinctly his grounds for objection.” Id. at 388;
see also United States v. Jake, 281 F.3d 123, 131-32 (3d Cir.
2002). By merely requesting a specific unanimity charge, then,
Pelullo did not properly object to the instructions. His reliance
on a de novo standard of review is thus unavailing.
2.
Rule 52(b) of the Federal Rules of Criminal Procedure
grants the courts of appeals the latitude to correct particularly
egregious errors on appeal regardless of a defendant’s trial
default. Fed. R. Crim. P. 52(b) (“A plain error that affects
substantial rights may be considered even though it was not
brought to the court’s attention.”); see also United States v.
Turcks, 41 F.3d 893, 897 (3d Cir. 1994). However, the plain
-53-
error standard is “out of place when a prisoner launches a
collateral attack against a criminal conviction after society’s
legitimate interest in the finality of the judgment has been
perfected by the expiration of the time allowed for direct review
or by the affirmance of the conviction on appeal.” Frady, 456
U.S. at 164.
Here, there is no dispute that Pelullo failed to raise the
jury charge issue in his opening brief on direct appeal. What the
parties do dispute is the efficacy of Pelullo’s attempt to
challenge the charges on direct appeal by way of supplemental
brief to the Court. Pelullo’s argument that Frady should not
apply, insofar as it carries any validity, is based on one
premise–that the government defeated his attempt to raise the
issue on direct appeal.
When Pelullo moved to file a supplemental brief, the
government opposed the motion, stating, in pertinent part:
If this Court denies appellant’s attempt to
improperly add additional claims to this appeal,
and appellant ultimately does not prevail in this
appeal, he will not be precluded from raising
these claims in a petition for relief under 28
U.S.C. § 2255 which, given the length of
appellant’s sentence, will inevitably follow this
appeal.
This Court subsequently denied Pelullo’s motion to supplement
his appeal without explanation. Based on the foregoing history,
Pelullo contends that the government should have been
-54-
judicially estopped from relying upon this purported procedural
default.
We find Pelullo’s attempt to blame the government for
his double procedural default unconvincing. As an initial
matter, he provides no explanation for failing to raise this matter
before the jury retired. He also provides no explanation for his
failure to timely raise this claim on direct appeal. Pelullo filed
a sixty-page Brief for Appellant, which raised eight points with
twenty-seven subparts. None of those points or subparts raised
his present challenge to the unanimity instructions. After the
government had filed its Brief for Appellee, Pelullo filed a
motion with this Court, seeking permission to file a
supplemental brief to complain for the first time about the
absence of a specific unanimity instruction.
It is well settled that an appellant’s failure to identify or
argue an issue in his opening brief constitutes waiver of that
issue on appeal. In re Surrick, 338 F.3d 224, 237 (3d Cir. 2003)
(claim that was omitted from appellant’s initial brief and raised
for first time in a reply brief was waived); see also Kost v.
Kozakiewicz, 1 F.3d 176, 182 (3d Cir. 1993) (noting “that under
Federal Rule of Appellate Procedure 28(a)(3) and (5) and Third
Circuit Local Appellate Rule 28.1(a) appellants are required to
set forth the issues raised on appeal and to present an argument
in support of those issues in their opening brief”). Thus, the
government’s representation notwithstanding, this Court, absent
exceptional circumstances, will not normally permit an appellant
-55-
to file a supplemental brief.30
By blaming the government for his procedural default,
Pelullo not only ignores his failure to raise the issue both at trial
and in his opening brief on direct appeal but also assumes that
this Court denied his motion to file a supplemental brief based
on the government’s representation. However, the order
denying Pelullo’s motion is silent as to the reasons for that
denial. The premise, therefore, that the government misled this
Court is based on nothing but conjecture. This is particularly so
in light of the independent and sufficient ground for denying the
motion, to wit, the well-established rule that the failure to
identify or argue an issue in an opening brief constitutes waiver
of that issue on appeal. See In re Surrick, 338 F.3d at 237.
For this reason, moreover, Pelullo’s invocation of judicial
estoppel is unavailing. In New Hampshire v. Maine, 532 U.S.
742 (2001), the Supreme Court noted that:
several factors typically inform the decision
whether to apply that doctrine in a particular case:
30
In his Motion for Leave to File Supplemental Brief,
Pelullo argued that the complexity of the case, with its
voluminous record and myriad factual and legal questions, was
the reason why the jury charge issue was not previously
identified (in his opening brief). No other reason was offered,
and though this Court did not articulate its reasons for denying
that motion, Pelullo’s proffered justification was less than
compelling.
-56-
First, a party’s later position must be clearly
inconsistent with its earlier position. Second,
courts regularly inquire whether the party has
succeeded in persuading a court to accept that
party’s earlier position, so that judicial acceptance
of an inconsistent position in a later proceeding
would create the perception that either the first or
the second court was misled. Absent success in a
prior proceeding, a party’s later inconsistent
position introduces no risk of inconsistent court
determinations, and thus poses little threat to
judicial integrity. A third consideration is
whether the party seeking to assert an inconsistent
position would derive an unfair advantage or
impose an unfair detriment on the opposing party
if not estopped.
Id. at 750-51 (internal quotations and citations omitted).
Inasmuch as Pelullo cannot show that this Court accepted the
government’s representation in denying his motion to file a
supplemental brief, there is “no risk of inconsistent court
determinations” and “little threat to judicial integrity.” Id. at
751; see also Montrose Med. Group Participating Sav. Plan v.
Bulger, 243 F.3d 773, 778 (3d Cir. 2001) ( “Judicial estoppel’s
sole valid use . . . is to remedy an affront to the court’s
integrity.”). Thus, an integral factor justifying the application of
judicial estoppel is clearly absent. See Bulger, 243 F.3d at 778
(holding that judicial estoppel is not appropriate where “the
initial claim was never accepted or adopted by a court or
-57-
agency”). 31
Accordingly, we reject Pelullo’s attempt to insulate his
collateral attack on the jury charges from the strictures of Frady,
and we hold that the proper standard of review is the “cause and
actual prejudice” test.
C.
Having determined that the proper standard of review for
Pelullo’s motion is the “cause and actual prejudice” test
enunciated in Frady, the question becomes whether the District
Court correctly applied this dual standard in dismissing Pelullo’s
petition.
Under the first prong of the Frady test, a defendant must
show cause existed for the double procedural default, i.e. failure
to raise the issue at trial and on appeal. To establish “cause” for
procedural default, a defendant must show that “‘some objective
factor external to the defense impeded counsel’s efforts’ to raise
the claim.” McCleskey v. Zant, 499 U.S. 467, 493 (1991)
(quoting Murray v. Carrier, 477 U.S. 478, 488 (1986)); see also
Wise v. Fulcomer, 958 F.2d 30, 34 (3d Cir. 1992). “Examples
31
In addition, it is not entirely clear that the
government’s positions are necessarily inconsistent. Pelullo
could in fact raise his objection to the jury charges in a § 2255
motion, as the government indicated, though he then faced, in
Frady, a significantly higher hurdle than would exist on direct
appeal.
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of external impediments which have been found to constitute
cause in the procedural default context include ‘interference by
officials,’ ‘a showing that the factual or legal basis for a claim
was not reasonably available to counsel,’ and ‘ineffective
assistance of counsel.’” Wise, 958 F.2d at 34 n.9 (quoting
McCleskey, 499 U.S. at 494).
Here, Pelullo offers no excuse for his failure to raise this
issue at trial or in his opening brief on direct appeal. His sole
contention is that cause exists for his failure to raise the issue on
direct appeal based on the government’s representation in
opposing his motion to file a supplemental brief. This
contention is insufficient for the reasons set forth above. As
such, the District Court correctly determined that Pelullo failed
to establish cause for his double procedural default.
Because Pelullo failed to establish the requisite cause
excusing procedural default, it is unnecessary to determine
whether Pelullo has shown actual prejudice. See United States
v. Griffin, 765 F.2d 677, 682 (7th Cir. 1985).
D.
The District Court properly dismissed Pelullo’s § 2255
petition pursuant to United States v. Frady, 456 U.S. 152. We
will therefore affirm the District Court’s denial of relief under
28 U.S.C. § 2255.
VII.
For the foregoing reasons, we will reverse the District
-59-
Court’s grant of a new trial, and we will direct the District Court
to reinstate Pelullo’s judgment of conviction and sentence. We
will also affirm the District Court’s denial of collateral relief.
In addition, we will remand the matter to the District Court for
resolution of the remaining issues raised in Pelullo’s § 2255
motion, and direct that the District Court, as a priority matter,
give serious consideration to vacating its Order of January 29,
2002, which had released Pelullo on bail.
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