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United States v. Johnpoll

June 18, 1984


Appeal from a judgment of the Southern District of New York, Robert L. Carter, Judge, convicting the defendant of conspiring to transport stolen securities and proceeds from the sale of those securities in foreign commerce in violation of 18 U.S.C. § 371, and six counts of transporting stolen securities and their proceeds in violation of 18 U.S.C. §§ 2 and 2314.

Mansfield, Newman and Pratt, Circuit Judges.

Author: Mansfield

MANSFIELD, Circuit Judge:

Harvey Johnpoll appeals from a judgment of conviction entered in the Southern District of New York by Judge Robert L. Carter on September 20, 1983, following a jury verdict finding him guilty of one count of conspiring to transport stolen securities and the proceeds from the sale of those securities in foreign commerce in violation of 18 U.S.C. § 371*fn1 (Count One); three counts of transporting stolen securities in foreign commerce in violation of 18 U.S.C. §§ 2 and 2314*fn2 (Count Three through Five); and three counts of transporting the proceeds from the sale of those stolen securities in foreign commerce also in violation of 18 U.S.C. §§ 2 and 2314 (Counts Ten through Twelve).*fn3 On September 20, 1983, Judge Carter sentenced Johnpoll to five (5) years imprisonment on the conspiracy count and ten (10) years on each of the six § 2314 counts, with the ten-year sentences to run concurrently with each other but consecutively to the five-year sentence. Judge Carter also imposed a $70,000 fine: $10,000 for each of the seven counts on which Johnpoll was convicted.

Johnpoll argues that the district court erred in (1) admitting into evidence the deposition testimony of certain Swiss witnesses because those depositions were taken in violation of Fed.R.Crim. P.15 and violated his Sixth Amendment Confrontation Clause rights, (2) failing to follow required procedures in responding to inquiries from the jury during deliberations, (3) improperly instructing the jury with respect to the inference that could be drawn from his possession of stolen property, (4) failing to direct an acquittal on the ground that the evidence was insufficient to establish that the securities charged in the indictment were stolen, (5) denying him his right to a speedy trial under the Speedy Trial Act, 18 U.S.C. §§ 3161, et. seq., and the opportunity to make pretrial motions and to engage in discovery. Johnpoll further argues that the government fraudulently obtained the assistance of the Swiss government under the treaty for Mutual Assistance in Criminal Matters, May 25, 1973, United States-Switzerland, 27 U.S.T. 2019, T.I.A.S. 8302, in conducting its investigation and thereby denied him due process. Finally, Johnpoll contends that the indictment was multiplicitous in charging him in separate counts with unlawful transportation of stolen securities and proceeds from their sale.

Except for the last of these contentions, we find no merit in Johnpoll's various arguments. Accordingly, we affirm his conviction on the conspiracy count (Count One) and the three counts of transporting stolen securities in foreign commerce (Counts Three through Five). We dismiss the other three counts charging unlawful transportation of the proceeds from the sale of the securities (Counts Ten through Twelve) and remand for resentencing in accord with our decision.

The record, viewed as it must be in the light most favorable to the government, Glasser v. United States, 315 U.S. 60, 80, 86 L. Ed. 680, 62 S. Ct. 457 (1940), reveals the following. Sometime between March and August 1980, $9.6 million in securities mysteriously disappeared from the vault of Securities Settlement Corporation ("SSC"), a brokerage house in Manhattan. The loss was not detected until late August 1980. From SSC's records, an auditing firm determined precisely which securities were missing, and the auditors testified at trial that the securities had to have been stolen.

Meanwhile, in July 1980, one Alexandra Kacenelenbogen contacted Remy Pfenniger, the president of Gestofinance, a Swiss import-export company, and offered to sell him $400,000 in American securities. Kacenelenbogen told Pfenniger that she was acting on behalf of Harvey Johnpoll, an American businessman who represented certain Italian planters. Pfenniger, who had a prior Swiss conviction for receiving stolen securities, feared that the securities might be stolen and declined the offer. Kacenelenbogen then took the securities to Gestofinance's Geneva offices, where she repeated the proposition to Jean Claude Genoud-Prachex, who worked for Pfenniger. Genoud-Prachex telephoned Johnpoll in New York; Johnpoll assured him that the securities were not stolen, explaining that he wanted to sell them through a Swiss company in order to avoid United States taxes. Following this conversation, Genoud-Prachex checked and determined that the securities had not been reported stolen and subsequently encouraged Pfenniger to pursue the deal. Pfenniger, still hesitant, telephoned Johnpoll and questioned him as to why he was not selling the securities through a bank. Johnpoll replied that he was fearful that a Swiss bank would report the sale. He offered Pfenniger 10% of the sale price if Gestofinance would serve as the intermediary and noted that he had an additional $6,000,000 in securities to sell through Pfenniger's company.

On July 11, 1980, Pfenniger went to the Geneva office of Merrill Lynch, Pierce, Fenner & Smith ("Merrill Lynch"), taking the securities that Kacenelenbogen had left with Genoud-Prachex. He opened an account in the name of Gestofinance, requesting Merrill Lynch to determine whether the securities had been reported stolen and, if not, to resell them immediately. That day, Merrill Lynch sold the securities for a net price of $391,825. The securities were in SSC's name and were later determined to be part of the $9.6 million theft. These securities formed the basis of Count Two, the count upon which a mistrial was declared when the jury was unable to reach a verdict as to Johnpoll's guilt.

Four days later, on July 15, 1980, Pfenniger transferred by wire $25,000 from Gestofinance's Swiss account to European-American Bank in Brooklyn for the account of Prieto International, Inc. ("Prieto"), a company wholly owned by Johnpoll. Five days later, Pfenniger and Kacenelenbogen flew to New York to meet with Johnpoll. Johnpoll reiterated that the securities belonged to Italian planters who wished to sell them through a Swiss intermediary in order to avoid taxes. Johnpoll and Pfenniger agreed that Pfenniger would receive a 2% commission on future sales. It was also agreed that future deliveries would be made by courier and that the courier would meet Pfenniger at the LaCoupole cafe across the street from Merrill Lynch's Geneva office. Before leaving New York, Pfenniger gave Johnpoll $293,000 cash as part of the proceeds on the initial sale.

Upon returning to Geneva, Pfenniger informed Susannah Maas, his attorney, about his negotiations with Johnpoll. Pfenniger asked Maas to assist them in avoiding Swiss taxes on the securities sales. Maas in turn set up a Liechtenstein corporation, Groclamare Anstalt ("Groclamare"), and opened an account at Merrill Lynch in Groclamare's name. Thereafter, on three separate occasions -- July 31, August 14, and August 15 -- Johnpoll notified Pfenniger by telephone that a shipment of securities would be arriving in Geneva. All three deliveries were made at the LaCoupole cafe by courier: $1,446,397 in securities on July 31; $1,813,759 in securities on August 14; and $2,364,247 in securities on August 15. Those three deliveries formed the basis of Counts Three through Five. On the occasion of each delivery, Pfenniger gave the securities to Maas who in turn deposited them in Groclamare's account at Merrill Lynch for sale. All of the securities were from the SSC theft. As soon as Merrill Lynch would sell the securities, Maas and Genoud-Prachex would withdraw the proceeds and deposit them into one of three Swiss bank accounts opened by Maas for the purpose of holding the money. Within a day of the deposit, Maas and Genoud would withdraw the funds in cash. By August 26, they had deposited and withdrawn $4,500,000 in cash from these three bank accounts.

After the first courier delivery, Johnpoll flew to Geneva and took a room at a hotel. Shortly thereafter, Pfenniger and Genoud-Prachex brought Johnpoll $725,000 in cash that had been withdrawn by Maas and Genoud-Prachex from the Swiss bank accounts. At Johnpoll's direction, on August 8, Pfenniger transferred another $192,450 to three American bank accounts: $72,170 to Prieto's account at European-American Bank; $86,610 to Johnpoll's Fine Art to the Consumer ("FATTC") account at the same bank; and $33,670 to the "Coming Generation American Musical Theatre Corporation" account at Chemical Bank. The $86,610 transfer to Prieto's account formed the basis of Count Ten of the indictment. At the same time, Johnpoll deposited $50,000 into yet another Swiss bank account in the name of Cavar Anstalt, a shell corporation that Maas had created at Johnpoll's request. Later that day (August 8), Johnpoll returned to New York with Maas; at customs, Maas declared that she was bringing $350,000 in cash into the country. Once through customs, she gave the cash to Johnpoll.

On August 15, after the sale of more stolen securities, Johnpoll telephoned Pfenniger with instructions to transmit a portion of the proceeds to New York. Pfenniger then transferred $73,159 to FATTC's account and $121,946 to Prieto's account. Those two transfers formed the basis of Counts Eleven and Twelve of the indictment respectively. Late that evening Johnpoll flew from New York to Geneva to collect the remaining monies from the sales. Back in Switzerland, Johnpoll travelled on August 18 to Bank Hapoalim in Zurich, where he had previously opened accounts in his own name, his wife's name, and in the names of each of his two children. He deposited $30,000 into his wife's account and $10,000 into each of his children's accounts. On August 25, Johnpoll deposited $900,000 into his Bank Hapoalim account and then immediately transferred $750,000 by wire to the Florida bank account of Jay R. Schneider. The next day Johnpoll deposited an additional $874,378 into his Bank Hapoalim account. On September 1, Johnpoll opened two new accounts at the Bank Hapoalim: an account for FATTC, into which he deposited $150,000, and a new account in his wife's name. Three days later, Johnpoll transferred $1,003,299 from his account at the bank into his wife's new account.

In the meantime, Merrill Lynch received information indicating that SSC's securities had been stolen. It immediately froze Groclamare's account. On September 5, Pfenniger informed Johnpoll of Merrill Lynch's action and told him that if the securities were stolen Pfenniger would go to the police.Within 24 hours of their conversation, Johnpoll fled Switzerland for the United States. Thereafter, on September 18, Johnpoll's wife telephoned the Bank Hapoalim and instructed it to wire $750,018 to an "Idea Development" account at Chemical Bank.

Two-and-a-half years later, on February 18, 1983, Johnpoll was indicted. On April 28, 1983, the government moved the district court, pursuant to Fed.R.Crim. P. 15,*fn4 for leave to take the depositions in Switzerland of four Swiss witnesses -- Pfenniger, Genoud-Prachex, Maas, and Ari Falkolf, an officer at the Bank Hapaolim -- on the ground that their attendance at trial could not be reasonably obtained. The government informed the court that although all of the Swiss witnesses with the exception of Falkolf had agreed to travel to the United States to testify at appellant's trial, each demanded payment for their time and trouble. Genoud-Prachex, for example required payment of $250 per day for time away from his business; Pfenniger required $150 per day for subsistence and $390 per day for time away from business. Both Genoud-Prachex and Pfenniger insisted that they must be allowed to bring their attorneys and that their attorney's air fare and fees also be reimbursed. Maas, the other key witness, demanded compensation for time away from work as well. The government contended that it did not have authorized funds to meet those demands; it was prepared to pay travel costs and "maintenance" costs, but no more.*fn5

At a May 3 conference Judge Carter requested the government to negotiate with the witnesses in order to reduce their demands. This proved troublesome, as the government was not allowed to communicate directly with the Swiss witnesses and the Swiss Central Authority refused to ask the witnesses to reduce their demands. On May 6, the government reported to Judge Carter that it had been unable to persuade the witnesses to reduce their demands. Accordingly, Judge Carter authorized the depositions.

At the May 6 conference the government reminded Judge Carter that there was an outstanding Swiss warrant for Johnpoll's arrest dating from 1980. The government expressed the willingness to make arrangements for a simultaneous telephone hookup so that Johnpoll could hear the proceedings and advise his counsel.*fn6 On May 24 the government informed the court that arrangements had been made for the depositions to be conducted during the week of May 30, and that it had made airplane and hotel reservations for Johnpoll and his attorney should either or both of them wish to attend.*fn7 At the May 24 conference Johnpoll requested authorization to depose "six or seven" other witnesses. However, since he never provided the names of those witnesses they were not deposed.

On May 27, before leaving for the airport, the Assistant U.S. Attorney in charge of the case telephoned Johnpoll's attorney, Edward Rudofsky, and left a message to the effect that the Swiss magistrates in charge of the scheduled depositions had finally agreed to allow full cross-examination. Earlier, those magistrates had indicated that all questions must be submitted in advance. The prosecutor also noted that arrangements had been made to permit a telephone hook-up so that Johnpoll could listen to the depositions. The prosecutor left for Switzerland at the appointed time but Rudofsky did not. Instead, Rudofsky delivered a letter to the U.S. Attorney's Office stating that he would not attend the depositions and that Johnpoll would be represented by a Swiss attorney for the purpose of raising objections to the proceedings.*fn8 On that same day, May 27, this court denied Johnpoll's petition to stay the depositions.

In Switzerland, the government deposed Pfenniger, Genoud-Prachex, Maas, Farloff, and Rene Gambazzi, a police officer whose deposition had been unscheduled. Johnpoll did not listen to the depositions through a telephone hook-up since both of his Swiss attorneys declined to participate in the depositions other than to state their opposition to the proceedings. Neither attorney cross-examined the deponents, although the magistrate had indicated his willingness to allow such examination.

When the Assistant U.S. Attorney returned to the United States with the depositions, Judge Carter examined them, heard Johnpoll's objections, excised those portions that were prejudicial or irrelevant, and determined that the rest of the deposition testimony was admissible ...

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