United States v. Isgro

Citations: 751 F. Supp. 846; 90 Daily Journal DAR 13930; 1990 U.S. Dist. LEXIS 17008; 1990 WL 185723Docket: CR-89-951-JMI

Court: District Court, C.D. California; September 4, 1990; Federal District Court

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The court dismissed the case against defendants Joseph Isgro, Raymond Anderson, and Jeffrey Monka with prejudice. The defendants were indicted on November 30, 1989, on 57 counts, including RICO violations, mail fraud, conspiracies, payola, filing false tax returns, and obstruction of justice. Specifically, Isgro faced 51 counts, Anderson was charged in counts 21-24, and Monka in counts 45 and 52-57. 

Throughout the pretrial phase, the defendants sought exculpatory evidence under Brady v. Maryland, but the government asserted that all material had been or would be disclosed, citing threats to a protected witness as the reason for any delays. Two weeks before trial, the government released Jencks Act materials. The primary witness for the prosecution was attorney/accountant Dennis DiRicco, who had previously been tried for money laundering and narcotics charges but was not disclosed as having provided testimony that contradicted the prosecution's case against the defendants. DiRicco's earlier testimony included denials of wrongdoing, and he acquitted himself of several charges in his previous trial. However, when called before the Grand Jury in August 1989, DiRicco's testimony changed significantly, contradicting his earlier statements and aligning with the prosecution's narrative against Isgro and the others.

DiRicco admitted to receiving cash from drug dealers, supplying it to ISGRO for criminal activities, and aiding cash couriers in evading security at San Francisco International Airport. He conspired with ISGRO and others to defraud the Government and record companies and described fraudulent transactions orchestrated by himself and ISGRO. Despite this new testimony contradicting his prior trial statements, Mr. Lynch did not disclose DiRicco's earlier testimony to the Grand Jury, nor did he ask DiRicco about it or mention that a transcript was available. The Grand Jury indicted the defendants without this critical information. During the trial, the defendants sought discovery, requesting Brady material, but the Government did not produce DiRicco's trial transcript and denied the existence of exculpatory evidence. The Government assured the Court of its compliance with discovery obligations while having possessed DiRicco's trial transcript for over a year. It was only when defense counsel conducted their own investigation that they discovered the transcript, revealing contradictions between DiRicco's trial and Grand Jury testimonies. They presented this evidence to the Court, claiming it constituted concealed Brady material and asserted that the prosecution had failed to meet discovery obligations and misrepresented facts. The defense requested sanctions against the Government, which initially denied inconsistencies but later retreated from that position in its brief, acknowledging the contradictions. The Court ordered further briefing on the issue.

The Government asserts that Mr. Lynch's limited familiarity with the material, having read it only once, does not impact the defendants since it was publicly available. However, the Government failed to disclose the existence of the transcript and misled the defendants regarding its availability. 

Key issues include whether the prosecution has infringed upon the Grand Jury's functions, violating the defendants' Fifth Amendment rights to a fair hearing, and whether the Court should use its supervisory powers to dismiss the indictment due to egregious government misconduct. 

Defendants argue that dismissal with prejudice is justified because the prosecution did not present prior contradictory testimony from their main witness, Dennis DiRicco, at the Grand Jury hearing, which they claim deprived them of a fair hearing and due process. They also allege that the government's actions, including evading the acknowledgment of Brady material, demonstrate outrageous misconduct warranting dismissal. An additional point raised is a prior ruling by Judge Rymer, who dismissed an indictment against another defendant due to similar governmental misconduct.

Regarding the usurpation of Grand Jury functions, case law emphasizes the protection of Grand Jury independence. While courts rarely dismiss indictments to maintain this independence, the Ninth Circuit allows for dismissal in cases of significant prosecutorial misconduct. The Supreme Court has established that indictments may be dismissed if a violation substantially influenced the Grand Jury's decision or if there is serious doubt regarding the independence of that decision.

The Government contends that impeachment of a witness during Grand Jury proceedings is unnecessary and that, even if it were required, dismissal of the indictment is not an appropriate remedy. The Court, however, finds that Government counsel demonstrated thorough preparation and a comprehensive understanding of the case, rejecting any implication of negligence in their recollection of witness DiRicco's prior testimony. While the Government's position on impeachment is generally correct, concerns exist regarding the potential overreach of prosecutorial control over the Grand Jury, which could undermine the constitutional right to a fair assessment by fellow citizens under the Fifth Amendment. The seriousness of the charges, particularly the RICO claim against ISGRO, heightens this concern, as DiRicco's testimony is pivotal to the prosecution's case and is influenced by his felony convictions and plea agreement. The Court notes that had the Grand Jury been aware of DiRicco's inconsistent prior testimony, it could have significantly impacted their evaluation of his credibility. Ultimately, the Court emphasizes that it was the Grand Jury's responsibility to make credibility determinations, not the prosecution's.

The Government's actions in presenting the case to the Grand Jury usurped its function, resulting in fundamental unfairness and violating the defendants' constitutional rights to a fair hearing. The Court determined that dismissal of the indictment with prejudice is warranted due to constitutional errors stemming from the Government's failure to disclose critical evidence. This dismissal aligns with the Court's inherent supervisory power, which allows for the dismissal of improper indictments to maintain judicial fairness. The Ninth Circuit recognizes this power in cases of prosecutorial misconduct or violations of due process.

The Due Process clause of the Fifth Amendment mandates that no individual be deprived of life, liberty, or property without due process. The Government withheld essential evidence from the Grand Jury, including testimony from the key witness, DiRicco, which could have exonerated the defendants. Additionally, the Government misrepresented the existence of this Brady material to the defendants' counsel and the Court, despite repeated inquiries. When confronted, the Government denied any wrongdoing, asserting that the prior testimony was not discoverable under the Jencks Act until after direct examination. The Court rejected this argument, affirming that Brady material can include inconsistent witness statements. The Government's claims of turning over Jencks material while simultaneously denying the existence of Brady material reflect a lack of good faith, particularly in their response upon learning the defense had obtained the prior trial transcript.

The Government initially denied possessing a pistol and subsequently denied its smoking status after being confronted with evidence. It argued that a transcript of prior testimony was a "public record" accessible to the defense, implying no obligation to produce it under Brady. However, this overlooks that the defense must know of such records to access them, and the Government had not disclosed that DiRicco had testified at his trial, which occurred in a courthouse far from Los Angeles. The defense was misled by the Government's false assurances regarding the non-existence of exculpatory evidence, which the Court found does not excuse the Government's failure to provide it. The Court concluded that the Government intended to withhold this crucial testimony, which exonerates the defendants and undermines the credibility of the Government's main witness. Additionally, the withholding of DiRicco's testimony was critical since it was essential for the indictments against the minor defendants and limited the major defendant's charges. The Court identified active misrepresentation by the Government regarding Brady material, as it had claimed all such material was turned over to the defense. Previous misconduct by the prosecution was noted, including a related case where the attorneys faced severe criticism and consequences for their actions. The Court determined that there was outrageous governmental misconduct in this case, necessitating the declaration of a mistrial and the dismissal of the indictment with prejudice.