DocketNumber： 3:07-cv-00211
Citation Numbers： 556 F. Supp. 2d 1313
Judges： Anne C. Conway
Filed Date： 6/5/2008
Status： Precedential
Modified Date： 1/13/2023
United States District Court, M.D. Florida, Orlando Division.
ANNE C. CONWAY, District Judge.
This cause comes before the Court on consideration of Defendant Thomas E. Vander Luitgaren's Motion to Dismiss. Doc. No. 37. United States Magistrate Judge David A. Baker has issued a Report & Recommendation on the Motion to Dismiss. Doc. No. 126 (hereafter "R & R"). Both the United States (hereafter "the government" or "the United States") and Defendant Vander Luitgaren filed timely objections to the R & R. Doc. Nos. 127, 129. The Court hereby MODIFIES and ADOPTS in part the R & R and DENIES Defendant Vander Luitgaren's Motion to Dismiss.
The Magistrate held a two-day hearing on March 12 and 13, 2008, to determine whether the United States met the standard for protecting Defendant's Fifth Amendment right against self incrimination set forth by the Supreme Court in Kastigar v. United States, 406 U.S. 441, 453, 92 S. Ct. 1653, 32 L. Ed. 2d 212 (1972). The Kastigar decision requires the government to show by a preponderance of the evidence that immunized testimony was not directly or indirectly used to further the government's investigation or to obtain an indictment by showing that the evidence used came from a legitimate, independent source. United States v. Bartel, 19 F.3d 1105, 1112 (6th Cir.1994); Kastigar, 406 U.S. at 460, 92 S. Ct. 1653. Even if Defendant Vander Luitgaren's immunized statements were used in violation of Kastigar, the indictment will stand if the government can show that the use was harmless beyond a reasonable doubt. United States v. Byrd, 765 F.2d 1524, 1532 (11th Cir.1985).
The only potential Kastigar violation raised in Defendant Vander Luitgaren's objections to the R & R that requires deeper analysis is whether the presentation to the grand jury of three pieces of immunized evidence[1] was improper. The three pieces of evidence at issue are: (1) Defendant Vander Luitgaren's explanation that the $30,000 payment he received from Co-defendant Candelario was a loan; (2) the $30,000 check from Defendant Vander Luitgaren's wife, Donna Vander Luitgaren, to Co-defendant Candelario allegedly for repayment of the loan; and (3) the handwritten note from Mrs. Donna Vander Luitgaren to Co-defendant Candelario thanking him for the loan. There is no dispute that the government presented these pieces of evidence to the grand jury and that this evidence was part of the case file. Doc. No. 126 p. 5. However, because these pieces of evidence were exculpatory, the government argues that its internal policy required disclosing them to the grand jury. Doc. No. 127 p. 3; Doc. No. 123 p. 10. Furthermore, the government argues that this exculpatory evidence was subject to disclosure to defendants by the government's attorneys pursuant to Brady v. Maryland, 373 U.S. 83, 87-88, 83 S. Ct. 1194, 10 L. Ed. 2d 215 (1963). Doc. No. 127 p. 3.
This Order first addresses the objections to the Magistrate's R & R made by the United States, and then the objections made by Defendant Vander Luitgaren. The Court holds that presentation of Defendant Vander Luitgaren's exculpatory explanation and supporting documents to the grand jury did not violate Kastigar. Even if the grand jury did not believe Defendant's explanation, presenting it to the grand jury was at most harmless error. See Byrd, 765 F.2d at 1532. Thus, the Court ADOPTS the Magistrate's R & R in its recommendation that Defendant Vander Luitgaren's Motion to Dismiss be denied. The Court respectfully MODIFIES one finding in the R & R, pursuant to 28 U.S.C. § 636(b)(1)(C). See infra p. 1321. However, this modification does not affect the validity of the Magistrate's analysis.
The Court has before it two days of testimony from the Kastigar hearing, more than 60 pages of briefing on the motion to dismiss by Defendant Vander Luitgaren, and more than 30 pages of briefing by the government. During the Kastigar hearing, Judge Baker permitted Defendant Vander Luitgaren to file a 9page legal memorandum containing additional argument as to why Defendant's Motion to Dismiss should be granted. See Hr'g Tr. Mar. 13, 2008 p. 120; Doc. No. 118. At the close of the Kastigar hearing, the United States filed an 18-page memorandum (Doc. No. 123), and Defendant Vander Luitgaren filed a 38-page memorandum (Doc. No. 125), further arguing the merits of the motion to dismiss. Counsel for Defendant Vander Luitgaren was apparently aware that his 38-page document did not conform to the local rules, because, in a footnote, he stated that he believed that length limits in the local rules did not apply, and, if they did, he simultaneously moved for permission to file the 38-page document. Doc. No. 125 p. 1 n. 1.
Counsel for Defendant Vander Luitgaren has repeatedly filed motions seeking exemptions from Court-set deadlines and the local rules, often simultaneously with substantive motions. See Doc. No. 80 (this Court denied six untimely motions by Defendant Vander Luitgaren, though two of the motions were later reinstated); Doc. No. 83 p. 2 (Judge Baker decided that Defendant Vander Luitgaren's motions were untimely, duplicative, and unnecessary); Doc. No. 100 p. 2 (document entitled "Motion to Dismiss Indictment and Motion for Leave to File After Criminal Scheduling Order Deadline," but the memorandum only contained argument regarding the substantive motion and merely incorporated by reference his co-defendant's argument in support of an extension of the deadline); Doc. No. 105 p. 2 (this Court denied Defendant's "Motion for District Court Review" of motions that were already denied by district court and also deemed untimely and without good cause by magistrate); Doc. No. 125 p. 1 n. 1 (38page supplemental memorandum on instant Motion to Dismiss assumes the local rule on length does not apply). The United States pointed out that these practices deprive it of the opportunity to respond as to whether exceptions and extensions should be allowed and instead forces the United States to respond to the substantive motions. Doc. No. 103 p. 3 n. 1. While the Court is not striking any of Defendant Vander Luitgaren's pleadings, the Court ORDERS Defendant Vander Luitgaren and his counsel to follow the local rules and the Court's Orders in this case. Further motions by any party that do not comply shall be stricken.
The United States objects to the R & R on the basis that the Magistrate inaccurately held that Mrs. Donna Vander Luitgaren, "confirmed that `Defendant did receive a loan and was innocent of any wrongdoing.'" Doc. No. 127 p. 2. The United States argues that Mrs. Donna Vander Luitgaren's testimony did not confirm her husband's immunized explanation that the $30,000 loan was for the purpose of restoring a Corvette. Id. Instead, Mrs. Donna Vander Luitgaren testified that the loan was to pay off a boat. Hr'g Tr. Mar. 13, 2008 pp. 94, 96. However, nothing in the R & R is inaccurate. As the R & R states, Mrs. Donna Vander Luitgaren confirmed that the payment was a loan and that her husband was innocent of any wrongdoing. Doc. No. 126 p. 5. That the R & R does not elaborate on the purposes given for the loan does not mean the R & R is incorrect. The distinction between Mrs. Donna Vander Luitgaren's statement regarding the boat loan and her husband's statement about restoring a car may prove to be relevant at trial. However, its omission from the R & R does not affect the Magistrate's analysis. Thus, the United States' objection is OVERRULED.
The United States also objects to the statement in the R & R that the United States acted contrary to "`the recommended practice for prosecuting individuals who receive use immunity,' which warned against permitting an attorney familiar with a defendant's immunized testimony to participate in prosecut[ing]" that defendant. Doc. No. 126 p. 7. The United States argues that because the immunized statement at issue was exculpatory, Department of Justice policy[2] and Brady, 373 U.S. at 87-88, 83 S. Ct. 1194, required that the prosecuting attorney convey the exculpatory materials to the defendants and to any new attorney prosecuting the matter, making it impossible to prevent "an attorney familiar with the immunized testimony" from participating. Doc. No. 127 p. 3. The United States is correct that it had a legitimate reason for not following the recommended practice of preventing disclosure of immunized exculpatory information to future counsel. However, the R & R remains correct that the United States did not follow the recommended practice. Doc. No. 126 p. 7. That the United States had grounds for not following the practice does not render the R & R incorrect on this point. Thus, the United States' objection to the R & R is OVERRULED. Even if the R & R was interpreted as being incorrect regarding the facts of the government's course of action, that would not affect the validity of the Magistrate's analysis.
Finally, the United States objects to the fact that the R & R indicates that the United States presented Defendant Vander Luitgaren's immunized statement to the grand jury in a manner that undermined his credibility. Doc. No. 127 p. 4. However, the Magistrate accurately characterized the grand jury testimony. Agent Woolard explained to the grand jury that Defendant Vander Luitgaren's explanation was inconsistent with his prior statement. Doc. No. 126 p. 8. Thus, the government's objection to the statement in the R & R that the government presented the evidence in a manner that called into question the credibility of Defendant's explanation is OVERRULED.
That the presentation of Defendant's loan explanation to the grand jury may ultimately have caused the grand jury to disbelieve Defendant's explanation does not mean that a Kastigar violation occurred. Bartel, 19 F.3d at 1113 ("Although the grand jury may have been suspicious of [defendant's] exculpatory testimony, the grand jury did not indict defendant... until after it heard the inculpatory evidence ... which was developed wholly independently" of the exculpatory immunized testimony.) As discussed more fully below, the exculpatory evidence presented to the grand jury here did not further the investigation or contribute to the indictment and thus did not violate Kastigar. See Bartel, 19 F.3d at 1112.
Defendant Vander Luitgaren's objections stress the idea that dismissal is required unless the government can demonstrate that nothing presented to the grand jury came from immunized testimony. Doc. No. 129 p. 7. It is true that Kastigar prohibits use of immunized statements in obtaining an indictment (406 U.S. at 460, 92 S. Ct. 1653), and it is clear that Agent Woolard expressly communicated Defendant Vander Luitgaren's immunized explanation that the $30,000 was a loan to the grand jury. But, the immunized information presented to the grand ury was Defendant Vander Luitgaren's own explanation for the $30,000 payment to him by Co-defendant Luis Candelario. If true, the explanation would absolve Defendant Vander Luitgaren. See Hr'g Tr. Mar. 13, 2008 p. 113. As in Bartel, 19 F.3d at 1113-14, the presentation of Defendant's side of the story to the grand jury did not violate Defendant's Fifth Amendment rights. The immunized evidence presented was exculpatory, and thus it did not "contribute to the indictment" so as to violate Kastigar. Bartel, 19 F.3d at 1113 14. Any other holding here would lead to indictments based only on the government's side of the story in those cases where exculpatory evidence also happened to be immunized testimony.[3]
It is true that Agent Woolard pointed out to the grand jury that Defendant Vander Luitgaren's immunized explanation was inconsistent with his prior statement. See Doc. No. 126 p. 8. Though the suspicious timing of Defendant Vander Luitgaren's explanation and the repayment and the apparent change in story may have raised doubts about the credibility of Defendant's explanation, the three pieces of evidence were still properly presented to the grand jury in context as exculpatory information. It is not for the government to decide which exculpatory statements hold water and will continue to prove exculpatory, nor is the government prohibited from placing evidence in context. The argument that "compelled testimony may have been considered by the grand jurors as corroboration for the evidence presented to the grand jury by [the agent]" is "meritless." Bartel, 19 F.3d at 1113. The government need not prove that the witness was not disadvantaged in every way, no matter how subtle. Id. Instead, the government need only show that it had an independent basis for the inculpatory evidence used. Id.
Withholding the exculpatory evidence from the grand jury and from future attorneys working on the case would not have safeguarded Defendant's constitutional rights under Brady and the Fifth Amendment and did not result in a Kastigar violation. See Bartel, 19 F.3d at 1113. Agent Woolard's testimony regarding Defendant Vander Luitgaren's explanation was at most harmless error and therefore does not invalidate the indictment. See Byrd, 765 F.2d at 1532. Thus, Defendant's objection is OVERRULED.
Defendant also objects to the R & R based on the fact that Agent Woolard had been exposed to the three pieces of immunized evidence and yet continued to investigate, interview witnesses, and testify before the grand jury. Doc. No. 129 p. 12. However, this theory is not a valid basis to object. The Eleventh Circuit has held that "[t]he focus of the inquiry under Kastigar ... is not whether the prosecutor was aware of the contents of the immunized testimony, but whether he used the testimony in any way to build a case against the defendant." United States v. Caporale, 806 F.2d 1487, 1518 (11th Cir. 1986). Prior self-serving testimony that is not useful to the subsequent investigation cannot be used to show a Kastigar violation and defeat the indictment. Caporale, 806 F.2d at 1518-19. The government here provided an independent basis for all of the evidence presented to the grand jury, except for the three pieces of evidence that constitutes his exculpatory explanation for the $30,000 payment. Doc. No. 126 p. 7. Mere awareness of the exculpatory evidence by Agent Woolard or the grand jury does not invalidate the indictment. Caporale, 806 F.2d at 1518-19.
Similarly, the Supreme Court in Kastigar rejected the argument that the indictment should be dismissed in all cases where the same grand jury hears a defendant make immunized testimony and later indicts that defendant. Kastigar, 406 U.S. at 460, 92 S. Ct. 1653. The Supreme Court rejected the argument that the indictment must be performed by a different grand jury simply because it would be "difficult and perhaps impossible ... to identify, by testimony or cross-examination, the subtle ways in which the compelled testimony may disadvantage a witness...." Bartel, 19 F.3d at 1111 (citing Kastigar, 406 U.S. at 460, 92 S. Ct. 1653). If it does not violate the Fifth Amendment to have the same grand jury hear a defendant's immunized testimony out of his own mouth and then later indict him, it does not violate the Fifth Amendment to have a testifying witness who is aware of Defendant's immunized statements testify before the grand jury.[4] Thus, Defendant Vander Luitgaren's objection is OVERRULED.
Defendant Vander Luitgaren also objects that Agent Dorney's Memorandum of Interview was placed in both the official case file and the case agent's working file. Doc. No. 129 pp. 1, 7. This objection is also meritless. Awareness by the investigating agent of exculpatory statements is not the concern of Kastigar. Caporale, 806 F.2d at 1518-19. Defendant Vander Luitgaren's objection based on the inclusion of reports containing the immunized explanation in the working file is also OVERRULED.
Defendant Vander Luitgaren argues that "[c]ontrary to the [R & R], Agent Woolard testified that his involvement prior to the proffer was very brief, and that he conducted all of his extensive interviews after the proffer." Doc. No. 129 p. 2. But, the R & R accurately states that "prior to the proffer at issue here, Special Agents Michael Dorney and William Woolard of the GSA-OIG conducted an investigation into this matter, including extensive witness interviews (19 witnesses from five companies) as well as extensive document review." Doc. No. 126 pp. 2-3. Agent Dorney testified at the Kastigar hearing that he had conducted 19 witness interviews, 18 of them before he interviewed the Defendant. Hr'g Tr. Mar. 12, 2008, pp. 16-17. While the R & R does not separate out the involvement of the two agents, there is nothing inaccurate in the R & R that merits correcting. Thus, Defendant Vander Luitgaren's objection is OVERRULED.
Defendant also objects on the basis that the R & R does not mention Angel Rodriguez-Vasquez. Defendant argues that the plea agreement with Mr. Rodriguez-Vasquez was a product of Defendant Vander Luitgaren's immunized statements.[5] Doc. No. 129 pp. 9-10. However, the government knew of Mr. Rodriguez-Vasquez's involvement long before the proffer. The government subpoenaed Mr. Rodriguez-Vasquez's bank records in December of 2005, before Defendant Vander Luitgaren's March 2006 proffer. Hr'g Tr. Mar. 12, 2008 Gov't Ex. 4. While the government bears the burden of showing by a preponderance that a Kastigar violation did not occur, Defendant cannot raise theoretical Kastigar claims based upon every event that occurred post-proffer. See Byrd, 765 F.2d at 1529 (the government is not required to negate every abstract possibility of taint). That the government made a plea agreement at some time after the proffer does not automatically indicate that immunized testimony was the basis for the plea agreement. There is nothing to indicate that Defendant Vander Luitgaren's exculpatory explanation caused Mr. Rodriguez-Vasquez to agree to testify against Defendant Vander Luitgaren. At the Kastigar hearing, the government presented copious evidence preceding the proffer that could have given Mr. Rodriguez-Vasquez an incentive to cooperate. See, e.g., AK Speciality Vehicle's Voluntary Disclosure Report, Hr'g Tr. Mar. 12, 2008 Gov't Ex. 1.
Contrary to Defendant Vander Luitgaren's argument, this case is not like United States v. Hampton, 775 F.2d 1479, 1489 (11th Cir.1985), where the Eleventh Circuit held that "the government made no effort ... to establish the independence of [the guilty-pleading defendant's] testimony or to demonstrate the source of the evidence confronting [the guilty-pleading defendant's] testimony at the time of the plea agreement." Instead, the United States presented a great deal of evidence implicating Mr. Rodriguez-Vasquez that the government had before the proffer. That the government received a second production of documents regarding Mr. Rodriguez-Vasquez from Banco Popular after the proffer does not negate the fact that the documents were produced pursuant to a pre-proffer subpoena (dated March 2, 2006). See Hr'g Tr. Mar. 12, 2008 pp. 40-45; Gov't Ex. 5. Thus, Defendant's objection based on Mr. Rodriguez-Vasquez's plea is OVERRULED.
Defendant Vander Luitgaren objects to the R & R because Agent Woolard testified that "he knew that Mr. Candelario paid $30,000 to Mr. Vander Luitgaren `based on bank records ... and interviews [plural] of Vander Luitgaren.'" Doc. No. 129 p. 2. Defendant argues that Agent Woolard's use of "interviews" means that Agent Woolard used information from both the proffer and the prior interview at Defendant Vander Luitgaren's home. Id. This objection is patently meritless. When asked about using "interviews" plural at the Kastigar hearing, Agent Woolard pointed out that he was only personally present at the interview at Defendant's home, not at the proffer, and that he misspoke if he said "interviews" instead of "interview." Hr'g Tr. Mar. 12, 2008 p. 172. Agent Woolard knew that Co-defendant Candelario had paid Defendant Vander Luitgaren $30,000 based on an independent source-bank records that he received prior to the proffer. Hr'g Tr. Mar. 12, 2008 Gov't Ex. 3. Bank of America gave the government bank records regarding the payments in February 2006 (Hr'g Tr. Mar. 12, 2008 Gov't Ex. 3), but the proffer was not until March 2006 (Doc. No. 126 p. 4). Thus, Defendant's objection is OVERRULED.
The R & R states that Defendant Vander Luitgaren admitted to making improper payments. Doc. No. 126 p. 3. Defendant Vander Luitgaren argues that it is disputed whether he admitted that the payments to him were improper.[6]Id. Defendant Vander Luitgaren is correct that at his proffer, he disputed whether the payments were improper. Thus, the R & R is respectfully MODIFIED pursuant to 28 U.S.C. § 636(b)(1)(C) to reflect that this fact remains in dispute. However, this discrepancy does not affect the validity of the Magistrate's analysis, nor this Court's decision to deny the motion to dismiss.
Defendant Vander Luitgaren argues that Exhibit 17 (AK Specialty Vehicles' Code of Conduct) was somehow a product of the immunized proffer testimony because it was "requested and received after the immunized testimony." Doc. No. 129 p. 4. However, this objection lacks merit. The United States knew that AK Specialty Vehicles was Defendant Vander Luitgaren's employer prior to the proffer, based on AK Specialty Vehicles' Voluntary Disclosure Report. Hr'g Tr. Mar. 12, 2008 pp. 147, 148, Gov't Ex. 1 p. 1. The United States has shown that investigation into the policies of that employer in relation to the alleged kickback scheme (of which the government was also enlightened through AK Specialty Vehicles' Voluntary Disclosure Report (Hr'g Tr. Mar. 12, 2008, Gov't Ex. 1 p. 1)) was not a product of Defendant Vander Luitgaren's proffer. Thus, Defendant Vander Luitgaren's objection is OVERRULED.
Defendant Vander Luitgaren also objects to the R & R by arguing that because the government stated that witnesses will be coming from various countries, including Afghanistan, the government must have used immunized testimony to develop witnesses. Doc. No. 129 p. 6 (citing Joint Motion for Date Certain (Doc. No. 93)). Defendant Vander Luitgaren bases this assertion on the fact that pursuant to his.proffer, he provided a letter that his son wrote while he was living in Afghanistan. Id. Defendant Vander Luitgaren's son is now deceased. Hr'g Tr. Mar. 13, 2008 pp. 98-99. Neither Defendant Vander Luitgaren nor the Court knows what witness, if any, will be coming to testify from Afghanistan, nor how this theoretical witness was developed. Defendant has no basis to object based on Kastigar with so little information. "The mere theoretical possibility of an eventual Kastigar violation at trial is no grounds for dismissing the indictment. If and when the government seeks to elicit or introduce evidence indirectly derived ... in such a manner, then [Defendant] would have cause to complain." Byrd, 765 F.2d at 1531. At this point, the reference to Afghanistan does hot indicate that the government used immunized testimony to further its investigation. See Hr'g Tr. Mar. 13, 2008 p. 70 (Judge Baker told Defendant that future potential Kastigar violations are not at issue). Thus, Defendant's objection is OVERRULED.
Defendant Vander Luitgaren also tries to make an issue out of whether copies of civil depositions of Defendant Vander Luitgaren and of Larry Sodomire were provided to counsel for the government or to Agent Domey. Doc. No. 129 p. 3. But, Defendant Vander Luitgaren simply states that AUSA Perez emailed the depositions to the government's attorney, James Kurosad, without any legal argument that there was a Kastigar violation. Id. Agent Woolard testified that he had not seen the civil deposition transcripts until January 2008 (Hr'g Tr. Mar. 12, 2008 pp. 153-54), and Agent Dorney testified that he has still never seen these deposition transcripts (Hr'g Tr. Mar. 12, 2008 pp. 108-09). The government has adequately shown that the civil deposition testimony was not used in furtherance of the investigation or to indict Defendant Vander Luitgaren. Thus, Defendant Vander Luitgaren's objection is OVERRULED.
Based on the foregoing, it is ORDERED as follows:
1. The Magistrate's Report and Recommendation (Doc. No. 126), filed March 21, 2008, is MODIFIED and ADOPTED in part as indicated herein.
2. Defendant Thomas E. Vander Luitgaren's Motion to Dismiss the Indictment (Doc. No. 37), filed on December 28, 2007, is DENIED.
DAVID A. BAKER, United States Magistrate Judge.
This cause came on for consideration following an evidentiary hearing on the following motion filed herein:
MOTION: MOTION TO DISMISS
(Doc. No. 37)
FILED: December 28, 2007
THEREON it is RECOMMENDED that the motion be DENIED.
On December 28, 2007, Defendant Vander Luitgaren (herein Defendant or Luitgaren) filed the instant Motion to Dismiss Indictment and Request for a Kastigar[1] Hearing. The government filed a Response in Opposition on January 4, 2008 (Doe. No. 49). The undersigned granted the request for an evidentiary hearing (Doc. No. 113), which was held March 12-13, 2008 (Doc. Nos. 114-15), and the parties have further briefed the issues (Doc. Nos. 123,124). The matter is now ripe for resolution.
Although discussed in more detail in the body of this Opinion, it appears from the testimony and exhibits presented at hearing (see Doc. Nos. 114-117) that, while the parties draw different inferences from the facts, the facts as to the course of the government's investigation are largely undisputed.[2]
As summarized by the government in its papers, on October 22, 2004, well prior to the proffer at issue here, Defendant's employer, AK Specialty Vehicles, LLC ("AKSV"), submitted a voluntary disclosure report to the General Services Administration, Office of Inspector General ("GSA-OIG"), which detailed AKSVs internal investigation into an alleged secret kickback scheme between Defendant and Co-Defendant Luis Candelario (herein Co-Defendant). According to the Indictment (Doc. No. 1), Co-Defendant's employer, JPS Communications, Inc., subcontracted work to AKSV on a Virgin Islands government homeland security contract. The Indictment asserts, among other things, that Defendant, who represented AKSV during the contract, made secret kickback payments to Co-Defendant for granting the subcontract to AKSV. The Indictment further asserts that Co-Defendant made "return kickback payments of $30,000" to Defendant for arranging the kickback payments to Co-Defendant (Doc. No. 1 at 5).
The voluntary disclosure report provided to the government included bank records, AKSV business records, and AKSV e-mails allegedly indicating that Defendant, through AKSV, made approximately $340,000 in secret payments to Co-Defendant (Government's Exhibit 1). As a result of AKSVs disclosure, and prior to the proffer at issue here, Special Agents Michael Dorney and William Woolard of the GSA-OIG conducted an investigation into the matter, including extensive witness interviews (19 witnesses from five companies) as well as extensive document review.
On December 6, 2005, still prior to the proffer at issue, Special Agent Dorney served a federal grand jury subpoena on Bank of America for the bank records of Defendant. On February 13, 2006, Bank of America provided Special Agent Dorney with bank records indicating that Defendant received two $15,000 payments from Co-Defendant (See Government's Exhibit 3). The payments were bank checks, dated March 22, 2004, and May 24, 2004, which purport to be from Co-Defendant, payable to the Order of Defendant. The government asserts that these payments coincided with Defendant making two equal kickback payments of $168,823.50 to Co-Defendant (on March 10, 2004, and May 21, 2004, respectively). (Government's Exhibit 1.)
On February 28, 2006, the special agents interviewed Defendant at his home without counsel present and before Defendant sought representation in this matter.[3] During this interview, according to the government, Defendant admitted to making improper payments to Co-Defendant in the amount of approximately $340,000. After the special agents showed Defendant copies of his bank records, he also allegedly admitted to receiving two improper commission payments of $15,000 each from Co-Defendant. Allegedly, Defendant did not indicate at that time that the $30,000 was a personal loan from Co-Defendant for the purpose of purchasing and restoring an automobile.
On March 1, 2006, the special agents served Defendant with a federal grand jury subpoena to testify before the grand jury. Thereafter, Defendant obtained counsel (Defendant's Exhibit D) and negotiated a proffer agreement with the United States Attorney's Office in the Middle District of Florida (Defendant's Exhibits F, G, and I). The proffer agreement provides, in part, that "in the event Thomas Vander Luitgaren is prosecuted, the government will not offer in evidence during its case-in-chief, or in aggravation of Thomas Vander Luitgaren's sentence ... any statements made and/or information provided by Thomas Vander Luitgaren at the interview, and any information directly and indirectly derived therefrom," subject to an exception for use in a prosecution for false statement, obstruction of justice, or perjury or to impeach any contrary testimony in the event Defendant offers testimony materially different from his statements in the proffer. (See Defendant's Exhibit I for full text).
On March 29, 2006, Defendant was interviewed at the Offices of the United States Attorney by the Government under the terms of this proffer letter and was represented by counsel. Assistant United States Attorney Carlos Perez was present, as was Special Agent Dorney. According to the Government, the scope of this interview rested solely upon information the Government had already obtained prior to the interview, and the interview centered on Defendant's explaining evidence presented to him by the Government. It is undisputed that the Government went over the substance of Defendant's previous interview. At the proffer, when asked about the $30,000 payments he received from Co-Defendant, Defendant advised that the $30,000 payment from Co-Defendant was a personal loan from Co-Defendant, to purchase and restore a Corvette (Defense Exhibit Z). Defendant asserts that in addition to orally communicating this information, he provided (either at the proffer or shortly thereafter) "tangible evidence" to the Government, including a document related to the purchase and restoration of the Corvette, a cancelled check dated March 10, 2006, from Defendant's wife to Co-Defendant, in the amount of $30,000, with a notation "loan repayment in full," and a copy of a personal note from Defendant's wife to Co-Defendant, referencing "repayment of the loan to Tom" and apologizing for "not being able to repay you sooner" (Defense Exhibits K, L, N, O, Q, R and S; Government's Exhibit 10, Grand Jury Exhibit 18).[4]
The Government asserts that this information "directly conflicted with defendant Vander's earlier admission that he received the money as an improper commission on the Virgin Islands contract" and notes that this "repayment" came "just days after his first interview with agents and after receiving the grand jury subpoena" (Doc. No. 123 at 4). On the other hand, Defendant's wife testified at the Kastigar hearing, confirming that Defendant did receive a loan and was innocent of any wrongdoing.
On December 5, 2007, Special Agent Woolard (not Special Agent Dorney) appeared before the grand jury and testified about Defendant's statements regarding the alleged loan. The March 10th check and note from Defendant's wife was presented to the Grand Jury (See Government Exhibit 10, Grand Jury Exhibit 18).
The Government contends that every overt act alleged in the indictment and every exhibit used in the grand jury proceeding, except Grand Jury Exhibit 18, came from sources and evidence received prior to the immunized evidence provided by Defendant, and the immunized statement and documents provided no leads in this investigation. According to the Government, other than the information regarding the alleged loan, no part of Defendant's immunized statement or documents were used to develop leads, develop witnesses, indict, or build a case against the Defendant. At the Kastigar hearing, Attorney Kurosad testified that the Government was required by Department of Justice policy to present Defendant's statements regarding the alleged loan and supporting documents to the grand jury, as exculpatory evidence.
Defendant contends that the Government made actual direct use, as well as indirect use, of admittedly immunized statements and documents, and thus "tainted" the grand jury, and this prosecution. It is the Government's burden to prove otherwise.
The prosecution of a witness who previously has given self-incriminating testimony pursuant to a grant of immunity raises a serious Fifth Amendment issue. "In Kastigar v. United States, 406 U.S. 441, 92 S. Ct. 1653, 32 L. Ed. 2d 212 (1972), the Supreme Court held that such a prosecution was allowable, but the prosecution is prohibited from `using the compelled testimony in any respect' that would `lead to the infliction of criminal penalties on the witness.'" United States v. Schmidgall, 25 F.3d 1523, 1528 (11th Cir.1994), citing Kastigar, 406 U.S. at 453, 92 S. Ct. at 1661 (emphasis original). Once a Defendant establishes that he has testified under immunity, the prosecution bears the burden of showing that its evidence is not tainted. This is done by establishing the existence of an independent, legitimate source for the disputed evidence. Kastigar, 406 U.S. at 460, 92 S. Ct. at 1665. The Government is required to prove an absence of taint by a preponderance of the evidence. United States v. Byrd, 765 F.2d 1524, 1529 (11th Cir.1985).
In carrying that burden, the Government is not required to negate every abstract possibility of taint. United States v. Schmidgall, 25 F.3d 1533, 1538 (11th Cir.1994) (Schmidgall II), citing Byrd, 765 F.2d 1524, 1529 (11th Cir.1985). On the other hand, the Government's conclusory denials regarding the use of immunized testimony, without more, are not sufficient. United States v. Hampton, 775 F.2d 1479, 1489 (11th Cir.1985). Proof of reliance on information gathered prior to the taking of immunized testimony generally is sufficient for the Government to carry its burden. Schmidgall II, 25 F.3d at 1537; Byrd, 765 F.2d at 1529.. Finally, even if immunized testimony was in fact used, an indictment or conviction may be upheld on a finding that the use of such tainted evidence was harmless beyond a reasonable doubt. Schmidgall, 25 F.3d 1523 at 1529; Byrd, 765 F.2d at 1529, n. 8.
As to the indictment and the apparent tenor of the government's case-in-chief, the Kastigar analysis is, with one caveat, not difficult. Consistent with the requirements of Kastigar, the government established that all of the elements and evidence of its proof as set forth in the indictment were developed and in hand prior to the immunized proffer session. It is quite clear that the government simply has not and, as of now,[5] does not rely on any information from the proffer as part of its case against Defendant. Each of the events and circumstances detailed in the indictment was derived from and supported by the voluntary disclosure report submitted to GSA and the ensuing investigation.
The only new information from the proffer was Defendant's claim that the two $15,000 payments to him were loans, unrelated to the vehicle purchase contract. Defendant intended this information to be exculpatory. As such, it has no logical place in the government's case, buttressing the conclusion that the government did not rely on the proffer in order to get the grand jury indictment and prosecute the case to this point.
The caveat to this analysis are the undisputed facts that the government did present Defendant's contentions about the loan to the indicting grand jury and that the current prosecutors and agents are fully acquainted with the immunized proffer, contrary to the recommended practice for prosecuting individuals who received use immunity. See, e.g., United States v. Byrd, 765 F.2d 1524 (11th Cir.1985) (warning that it is unwise to permit an attorney familiar with immunized information to participate in prosecution). Nonetheless, where the government has meant its burden of showing independent sources for each piece of evidence and the immunized information was self serving and of no real value to the investigation, there is no absolute bar. See United States v. Caporale, 806 F.2d 1487 (11th Cir.1986), cert. denied, 483 U.S. 1021, 107 S. Ct. 3265, 97 L. Ed. 2d 763 (1987). See also United States v. Bartel, 19 F.3d 1105 (6th Cir.1994).
The government defends its presentation of the Defendant's loan contentions as part of its obligation to provide the grand jury with potentially exculpatory information. While this is technically plausible, the grand jury transcript does not reflect that the information was presented in that vein. Rather, the account of the loan was presented as in the sequence of Defendant's explanations of events, perhaps, by implication, to undermine his credibility. This does not, however, represent the type or degree of "taint" necessary to establish a Kastigar violation. In light of the well developed and documented inculpatory record, any error in presenting the proffer information to the grand jury in this fashion was harmless.
The other assertions of violations are insubstantial. Defendant has not provided any evidence and the circumstances do not suggest any contradiction of the government's showing that evidence from alleged co-conspirator Rodriguez-Vasquez was not influenced by information from the proffer. There is no indication that deposition transcripts from the civil case have had any effect on this prosecution, even if the government's knowledge of their existence or content were deemed fruits of the proffer. Finally, Defendant's efforts to divine the mental processes of the agents and prosecutors are unavailing simply because the evident disdain of the government for the loan explanationprosecutors and agents who disbelieve this evidence cannot be said to be relying on it.
Based on this analysis, there is no occasion to address the government's alternative assertion that Defendant's false statements about the loan during the proffer vitiate the immunity agreement entirely.
An additional matter should be noted. The issue of use of information from the proffer may surface at trial in a different context. If Defendant offers evidence to explain the $15,000 checks as loans, the government likely will seek to refute or rebut such evidence. It is beyond the scope of this Report and Recommendation to determine any issues that may arise in that event.
Failure to file written objections to the proposed findings and recommendations contained in this report within ten (10) days from the date of its filing shall bar an aggrieved party from attacking the factual findings on appeal.
Respectfully recommended in Orlando, Florida on this 21st day of March, 2008.
[1] In this Order, the Court also addresses Defendant Vander Luitgaren's objections to the R & R based on other pieces of immunized evidence and why those objections lack merit.
[2] See U.S. Attorney's Manual § 9-11.233, "Presentation of Exculpatory Evidence" (While the Supreme Court has not required divulging exculpatory information lo the grand jury, "[i]t is the policy of the Department of Justice ... that ... the prosecutor must present or otherwise disclose [evidence that negates guilt] to the grand jury before seeking an indictment against such a person.").
[3] Thus, Department of Justice policy requires presentation of exculpatory evidence to the grand jury. See U.S. Attorney's Manual § 9-11.233, supra n. 1.
[4] Defendant Vander Luitgaren also objects that "at least the loan testimony was used when questioning other witnesses, specifically including Donna Lewis." Doc. No. 129 p. 5. Though Defendant Vander Luitgaren gives no citation for this proposition, the Court believes he is referring to Agent Woolard's testimony that he "might have asked in some interviews about a loan," but "was never able to confirm that a loan existed." Hr'g Tr. Mar. 12, 2008 p. 179. Defendant Vander Luitgaren also cites the discussion of Ms. Lewis before the grand jury. Doc. No. 129 p. 5. However, there was no mention of the loan in conjunction with Ms. Lewis before the grand jury (see Dei. Ex. DD). Any mention of a loan to Ms. Lewis during an interview is speculative. If it had been mentioned, it was never confirmed. The government need not negate every abstract possibility of taint. Byrd, 765 F.2d. at 1529. On this testimony, the possible mention of the loan is harmless error and not grounds to dismiss the indictment. Id. at 1532.
[5] Defendant Vander Luitgaren did not mention Mr. Rodriguez-Vasquez and many other of these objections in his motion to dismiss (Doc. No. 37), but to avoid additional delay, the Court will set aside the issue of waiver and consider all of Defendant's objections to the R & R.
[6] Defendant Vander Luitgaren now attempts to show that the payments were proper, because his employer was aware of them. Doc. No. 129 p. 3. The propriety of the payments is not at issue on the Motion to Dismiss and instead is a question of fact for the jury.
[1] Kastigar v. United States, 406 U.S. 441, 92 S. Ct. 1653, 32 L. Ed. 2d 212 (1972).
[2] The motives behind and implications of Defendant's financial transactions with his Co-Defendant, on the other hand, are strongly contested.
[3] Defendant was represented by counsel in a civil action arising out of termination of his employment. Middle District of Florida Case No. 6:05cv185-ACC-KRS.
[4] Defendant also provided copies of civil depositions of Mr. Sodomire and Defendant, with exhibits, but AUSA Perez could not recall if the depositions were provided to Special Agent Dorney.
[5] The Kastigar issue does not disappear upon disposition of this motion. At trial, the government remains obliged to avoid any use of information derived directly or indirectly from the proffer.
United States v. Christian Schmidgall , 25 F.3d 1533 ( 1994 )
United States v. Bryant L. Hampton , 775 F.2d 1479 ( 1985 )
United States v. Thomas E. Byrd , 765 F.2d 1524 ( 1985 )
United States v. Michael Bartel , 19 F.3d 1105 ( 1994 )
United States v. Christian Schmidgall , 25 F.3d 1523 ( 1994 )
united-states-v-james-caporale-alfred-pilotto-seymour-a-gopman-bernard , 806 F.2d 1487 ( 1986 )
Brady v. Maryland , 83 S. Ct. 1194 ( 1963 )