Spies Use IMF Fraud Overseas
17 Mar 2006 22:59 GMT
Non-Official Cover (NOC) government intelligence agents are sinking independent foreign currency and investment houses using fraud to drive people back to domestic institutions. Offshore capital flight has reached epic proportions and is now considered a threat to national security. NOC agents, with hidden ties to government, operate with impunity committing frauds causing people to lose foreign investments. Where the lost monies end-up is a big secret because its funding NOC agent operations for the governments. Here's how:
Spies Use IMF Fraud Overseas
March 17, 2006
Non-Official Cover (NOC) government intelligence agents are sinking independent foreign currency and investment houses using fraud to drive people back to domestic institutions. Offshore capital flight has reached epic proportions and is now considered a threat to national security. NOC agents, with hidden ties to government, operate with impunity committing frauds causing people to lose foreign investments. Where the lost monies end-up is a big secret because its funding NOC agent operations for the governments. Here's how:
On August 8, 2004 the Sunday Tribune (Dublin, Ireland) interviewed a Non-Official Cover (NOC) foreign government intelligence agent named Gabriel Francis MacEnroe who claimed the United States F.B.I. Portland, Oregon (USA) field office called him (early-2000) to contact executives at an independent offshore bank, in The Caribbean, identified as First International Bank of Grenada Limited (FIBG LTD.). MacEnroe’s first meeting bank founder Van A. Brink (fka) Gilbert A. Ziegler began with a jolt, "You're Mr. Ziegler, not Mr. Brink.” According to the Tribune MacEnroe said Brink took exception and claimed MacEnroe worked for the CIA. “I don't work for anyone,” he shot back, which appears as the first of many lies sending an estimated $105-million of the bank depositor’s monies straight into a ditch.
For the Tribune MacEnroe’s story began with, "At the same time, I was called by the FBI's Oregon office, which had found out that I was in Grenada, and asked if I could give them details of the bank. I did and so the agency was able to prosecute Ziegler."
MacEnroe’s tune changed though for FIBG LTD. bank CEO Mark Kennedy with something to the effect that he arranged IMF loams and that the bank could become a project bank for the International Monetary Fund (IMF), and if not he knew of others who might assist the bank depending on what the bank had to offer besides its 10,000-carat hand-carved ruby statue depicting a boy on a water buffalo valued at $20-million some say the bank was originally capitalized with to procure its Grenada bank license.
What else did the bank have for assets? For starters, it had a joint venture contract agreement tying Indonesian legacy heritance certificates of deposit drawn on the UNION BANK OF SWITZERLAND (UBS) valued at $8.7-Billion dollars, which itemized precious bullion metals of gold and platinum in estate holdings of former Indonesia Premier Ir. Soekarno. MacEnroe claimed the bank had no title of it, however records prove the bank indeed held entitlement to receive 50% of trading profits for a period of two (2) years from the estate holder who signed over his Power Of Attorney along with an Irrevocable Deed Of Assignment, Safe-Keeping Receipt, and more.
The Sunday Tribune reported MacEnroe refuted claims he had not divested FIBG LTD. bank of its assets nor was he arranging for a group of European investors to take over the bank.
In January 2006, evidence surfaced revealing that in 2000 those high-value asset instruments connected to FIBG LTD. bank were ‘heritance certificates of deposits’ and ‘heritance bank guarantees’ for billions in precious metal bullion linked to the Premier Ir. Soekarno Estate and within his friend Mr. A. G. Pringgodigdo estate holdings identified at the UNION BANK OF SWITZERLAND (UBS) placed under a Mandate With Power of Attorney [UBS code: A.101.M.1] administered by a man named Muchamad Muchlan Buchori.
When Mr. Buchori died in 1984, his son named Muhamad Burhan (Jakarta, Indonesia) tried taking control of all Administration books, but his late-father Muchamad Muchlan Buchori had arranged that they ‘not’ pass to ‘his successor’ son Muhamad Burhan, but instead UBS saw an entity named PT GALAXY INDONESIA TRUST with two (2) men named through Premier Ir. Soekarno’s Last Will and Testament that would control the assets. One man was named Dr. Halim (Switzerland) and the other Dr. Edison Damanik (Jakarta, Indonesia), the latter of whom saw to distributing those UBS ‘heritance certificates’ to be handled under very specific instructions on their use. It was at that time when these high-value instrument certificates began surfacing around the World.
After Dr. Damanik passed-away, control over those valuable instrument holdings passed to another party (names in files).
It is believed all Estate holdings were placed under the control of one ‘committee’ for family members named in a ‘collective leader board’. Further, that Estate funds appear to have not been touched by the appropriate Administrator for the past 35-years because that particular person has not yet claimed the position to do so.
In the meantime a lot of dangerous games appear to have been played regarding these heritance certificates as “worthless”, “fraudulent”, etc. by certain banks including that of ABN-AMRO and UBS alongside Mr. Burhan who ‘had’ access to e-Banking linked to UBS for the Estates. It is believed the heritance committee decided to block his PIN code access as of 2003 due to curious financial business activities.
Mr. Burhan is a close friend of Endang Darmawan, appearing to act as front-runner alongside Ir. Gunardjo, Paimo (aka) F. Danarasa, Halim Dharmakusuma, M. Damanik, Kho Hian Sui, and Prebon Marshall Yamane.
A group believed to hold committee interest claims Mr. Burhan has been curiously protected by the U.S. National Security Agency (NSA) based on accounts tied to a man named Fredrick J. Robinson (Wichita Falls, Texas, USA), believed to be an oil consultant for 15-years working out of Bangkok, Thailand.
In early-2000, MacEnroe tried convincing FIBG LTD. bank Board of Director executives the assets they held were worthless, however behind the scenes and out of their view he consorted with FIBG LTD. bank CEO Mark Kennedy to convert one $8.7-billion asset into ‘another’ $8.7-billion asset he then saw labeled as the takeover bank “new asset” planned for re-injection support but under his European client group, which made no promises of providing any returns to former FIBG LTD. bank depositors.
Van A. Brink had drawn the FIBG LTD. bank controlling shareholder’s attention to the facts surrounding the mysterious MacEnroe deal.
Holding what appeared to be a key-position for the FIBG LTD. bank Board of Directors as whether to go with the FBI directed MacEnroe plan to steal the bank just as one $8.7-billion asset had already been done and crush all hope of depositors ever seeing their monies again or not was up to Cynthia Joy (Tai”) Hastey.
Hastey refused to give-in after what she was made aware of MacEnroe’s weeks of broken promises to the bank, which she viewed as an ‘economic threat’ forced by unreasonable demands on the bank with no guarantee for bank depositors, vendors, and staff just so the MacEnroe plan takeover group could also avail themselves of the other high-value assets already placed in trade from Brazil, trading profits that once returned would clear-up the bank.
Her counter-offer letter tendered to MacEnroe through FIBG LTD. bank CEO Kennedy appears to have never even been passed on to MacEnroe at all. Instead, Kennedy resigned within 24-hours on July 4, 2000.
On July 5th, 2000 the Board entered negotiations with a London, UK barrister Lawrence A. Jones to take over the FIBG LTD. bank CEO position, which saw him formally accept before the Board on July 8th, 2000.
Although the MacEnroe deal was rejected, he never saw to returning the FIBG LTD. bank $8.7-billion dollar placed asset instruments from the Soekarno and Pringgodigdo Estates, which had originally been seen injected into FIBG LTD. bank by a man named Robert Earl Palm (Canada).
After Van A. Brink resigned as FIBG LTD. bank CEO on October 1, 1999 his successor CEO Mark Kennedy immediately met in Grenada with an international oil consultant named Michael K. Gabriel who had co-authored a global economic report with Van Brink earlier. After CEO Kennedy resigned and Lawrence Jones took over as CEO for a brief interim, Michael K. Gabriel became CEO of FIBG LTD. bank and immediately contacted former CEO Mark Kennedy in an effort to resurrect the MacEnroe takeover plan once again.
In a 27-page letter written () by former FIBG LTD. bank CEO Michael K. Gabriel to former FIBG LTD. bank CEO Lawrence A. Jones, CEO Gabriel describes the MacEnroe takeover plan in detail, mentioning the FIBG LTD. bank $8.7-billion Indonesian asset instruments from UNION BANK of SWITZERLAND (UBS), which MacEnroe saw to having reconstituted (re-built) in Jakarta, Indonesia with others (named in my files) in-conjunction with three (3) Swiss banks (i.e. UNION BANK of SWITZERLAND (UBS), its client-bank CREDIT SUISSE, and BANK for INTERNATIONAL SETTLEMENTS (BIS) so the asset instruments would be re-designed in such a way so as to ‘appear different’ and break the link having been previously connected to FIBG LTD. bank joint venture contract agreements, thereafter leaving FIBG LTD. bank unable to lay any legal claim that it was once in joint control over those Indonesian heritance asset instruments. Henceforth, the $8.7-billion asset having been transformed via FBI-MacEnroe directions, indistinguishable and thereby un-linked to FIBG LTD. bank history showing such asset instruments tied-in to its past, could then be ‘technically spoken-of’ as a “new asset”, which MacEnroe then led FIBG LTD. bank Board of Directors to believe via its mouthpiece CEO Mark Kennedy.
And ‘if’ such a European takeover group ever existed, which MacEnroe later claimed on August 8, 2004 that “there was no European consortium”, then MacEnroe’s fraudulent statements and those of his recruited de facto deputy agent CEO Kennedy were both in furtherance of criminal deception used against FIBG LTD. bank that served to disrupt and cause monetary depositor losses, according to what the U.S. government indictment states against former executives of FIBG LTD. bank – federal criminal defendants, now in Portland, Oregon – that “either the assets were fraudulent or never existed”, but behind-the-scenes - out of public purview - at the helm were U.S. government Non-Official Cover (NOC) foreign agents set-upon FIBG LTD. bank, according to the statement of MacEnroe, one of the agents involved in the scheme to put in-play a clever scheme to defraud and deprive FIBG LTD. bank of assets purposely designed via joint venture contract agreements to re-pay its bank depositors within the framework of its ‘scheduled high-yield interest’ as seen on its own “rate sheet”.
In short, not only did FIBG LTD. bank depositors lose their monies, but also FBI-MacEnroe and CIA-Palm led plans served to enhance the appearance of outrageous fraudulent behavior as what the U.S. government indictment appears as today. It’s only obvious, the former FIBG LTD. bank executives and their corporate counsel were conned by U.S. government Non-Official Cover (NOC) intelligence agents, one (1) of whom was placed ‘on loan’ to the Portland, Oregon field office of the F.B.I. according to his latter (08AUG04) statements revealing who called him to send him in on FIBG LTD. bank in Grenada.
Non-Official Cover (NOC) U.S. Government Agents
10-Step Trading Plan: How It Works
For decades, the U.S. government has used NOC agents where it wishes to deny its foreign actions as was revealed in headline stories in 2006 involving recently linked NOC agents to The White House. The use of NOC agents is nothing new, except to the general public.
U.S. government involvement is kept secret through a cleverly devised chain of attornies who act as ‘cut-outs’ between government intelligence plans and NOC agents sent-in to do government dirty work. Often times, NOC agents appear to be Teflon-coated, where they are excused of any wrong doing and allowed to get away with whatever monies they can scam out of targets during these highly secretive government operations.
In the case of FIBG LTD. bank, its network of other banks, and depositor victims the NOC agent government operation is quite simple yet deviously clever to ensure reduction, re-direction, and stemming-of Western country domestic-based capital flight from recognized and controlled ‘domestic registered banks’ and ‘domestic insurance company pension plans’ to stop unrecognized and uncontrolled foreign-based ‘independent off-shore banks’ and ‘independent off-shore insurance companies’. These latter groups, a threat perception recognized by Western intelligence agencies pose a ‘grave threat’ to ‘existing balances of economic national security’ when ‘independent offshore financial institutions network’, then-significant as an independent – yet networked - uncontrollable sources of money flow movements internationally in directions, contrary to what Central Banks and the U.S. Federal Reserve System (FED) would otherwise see controlled whereby this ‘wobble effect’ counter-balances the existing World banking ‘system’.
The ‘system’ or World banking system as it exists today, has its basis conceived on ‘fractional reserve banking’ and its seemingly never-ending expansion of fiat paper currency money supply it uses to float loans, trade, etc. with history dating back to 1928 up through present day proving Western intelligence agencies have protected that well-entrenched heritance / traditional World bank system’ working concept anywhere an independent international banking system pops-up a commodity-based (e.g. independent banks planning to tie themselves to precious metals, such as a network of gold-based banks) utilizing ‘inverse leverage’ as the anti-thesis of the traditional ‘fractional reserve’ and ‘fiat currencies’ for float. Western intelligence protection is the ‘action arm’ of Foreign Policy directive edicts seen from Executive Branch Level governments (i.e. Presidents, Prime Ministers, Premiers, Kings, Queens, and other potentates.
The U.S. government foreign policy intelligence plan became operationalized upon Non-Official Cover (NOC) foreign agents being sent-in to initially ‘inject evidence’ of high-value asset instruments and later ‘withdraw evidence’ tied to FIBG LTD. bank and its network of IBC and satellite constellation of sub-banks pooling depositor monies lost across that spectrum into black-hole trading programs claimed by both NOC agents. The plan was nicknamed, “Texas Two-Step”.
High-Value Asset Instrument Distribution
In 1984, specific high-value asset instruments were sent by Southeast Asia and South Pacific interests to Europe and from there to India where they were turned around and sent to the Far East.
In 1986, these same high-value asset instruments appeared from Europe in the Middle East.
Crime History Of High-Value Asset Instruments
In July 1991, these same high-value asset instruments along with ‘others’ (e.g. 88 certificates from Japan (alone), other foreign and domestic country transaction obligations, to include: one (1) $278-Billion dollar certificate, $45-Billion dollar certificate, etc., etc.) were confiscated in Texas (USA). See, e.g. U.S. District Court (Austin, Texas) USA vs. Edison Damanik, CASE NO.: A-91-200-M and CASE NO.: A-91-CR-00107 (aka) 1:91-CR-107; and, U.S. District Court (Dallas, Texas) USA vs. Tommy Lee Buckley, Lewis Wilborn Driver (Giddings, Texas), et al.
On April 1, 1992 AUSA Price requested - on behalf of the U.S. government - all federal criminal charges ‘dismissed’ against Dr. Edison Damanik (Indonesia) eleven (11) days after a mysterious lawyer named Barry E. Burke (Chicago, Illinois) came out of retirement, was added as co-counsel to Stephen M. Orr, Esq. in the defense of Dr. Damanik defense case.
With more than five (5) federal felony arrests - made by U.S. Secret Service agents in at least two (2) Texas cities (Dallas and Austin) - the high-value asset instruments case was dismissed by the U.S. government after 9-months. Who was that mystery lawyer from Chicago, Illinois who - without so much as ever having made one (1) pleading - saw this huge federal criminal case dismissed on a Motion by the U.S. government out of the clear blue sky?
Just after the Damanik federal case was dismissed in 1992, the former Soviet Union KGB identified a man named Robert Earl Palm as a U.S. government Non-Official Cover (NOC) foreign agent involved in a currency exchange fraud where he was seen putting ‘high-value asset instruments’ into play.
The KGB provided official Russia, Ukraine, Poland, Finland, and US documents faxed by Robert Palm, now available on the internet, linking him to a $15-billion dollar (USD) trading program named “YOKAMURA” in a case involving COLE-TAYLOR BANK (Chicago, Illinois), WINDOW TRADING LTD., CARTESA FINANCE (Switzerland, Liechtenstein, and Brazil), and others involved. Today, the Russian government claims Robert Palm spurred into action Russia’s capital flight problem over a 5-year period that saw to removing nearly $1-Trillion - in U.S. dollar value terms - where later upon Russian request, the U.S. government called-in a firm named KROLL ASSOCIATES to assist the Russian government in tracking down ‘where their money went’. KROLL was never able to locate or recovery any of Russia’s missing Trillion dollars. According to The Wall Street Journal (23JUL93) report, Robert Earl Palm claimed in 1991 that he was the representative of UNITED NATIONAL REPUBLIC BANK (UNRB) of Russia holding assets of $1.895-Trillion dollars in (USD) value. The Russian government indicated their records showed no bank ‘by that name’ registered ‘in Russia’ at ‘that time’.
In 1994, two (2) years after the Dr. Edison Damanik case saw his high-value asset instruments ‘checked out of’ the Austin, Texas U.S. District Court evidence safe - based on a special request by AUSA Price on behalf of the U.S. government, some of them re-appeared ‘again’ in a Sydney, Australia federal criminal case naming Anthony Hamod with $78-billion+ in (USD) high-value asset instruments. As in the Damanik case, Anthony Hamod was arrested and federal criminal charges against him dismissed months later. But, the Australian federal court evidence points to Anthony Hamod claiming he met with Dr. Edison Damanik in Switzerland and that the instruments came from a Damanik controlled Indonesia company named PT GALAXY INDONESIA. The Australian federal court ordered that those high-value asset instruments be released back to Anthony Hamod in 1996, however the record is unclear as to whether Hamod ever received those instruments over Australian federal law enforcement objections.
In 1998, two (2) years after the Anthony Hamod case in Australia, Robert Earl Palm shows up with his high-value asset instruments again, but this time in Canada where they were sent down to the Caribbean for injection into the First International Bank of Grenada Ltd. (FIBG LTD.) bank asset structure through joint venture contract agreements with international business companies, which included SHERWOOD INVESTMENTS (BAHAMAS) LTD. tied to Robert Earl Palm.
In an interview with FIBG LTD. bank founder and first CEO, Van A. Brink, he met Robert Earl Palm in-person and for several days in Victoria, British Columbia, Canada. Palm tried schooling Brink on how those high-value asset instruments might be used.
Brink said, “Palm’s assistant [Jason Matthew Walsh (aka) Matt Walsh] wheeled a small file cabinet over to Palm, who removed a ‘few’ billion worth of asset instruments and threw them in my lap saying, ‘If the bank does well with these, I’ve $2-Trillion (USD) more right here’.”
How The Odds Work: Two-Steps to 10-Steps
While the Texas Two-Step may be all that’s seen inside Fanx I at Maryland (USA), NOC agent field operations identify at least ten (10) stages for their operation to have any success at all.
A list of basics, understood to work most small independent offshore banks, see:
Convincing Target Banks
First (1st): send-in the first (1st) Non-Official Cover (NOC) foreign agent who sees to injecting – without signing anything dealing with - high-value asset instruments that read (on the face of the instruments) in (USD) values worth billions ‘each’. Announce to the small independent offshore bank executives that the instruments can be verified by bank corporate counsel using due diligence. That after the bank is satisfied, placement of those asset instruments into special / secret trading programs will net the banks incredibly high rates of return to the tune of hundreds if not thousands of percentage points in returned trading profits for them. Claim the assets as well as trading programs are known only to government central banks or incredibly huge organizations kept secret for decades so typical retail and commercial banks never really know how much profit in the billions are actually being made on pooling depositor’s monies in such trading programs where the minimum entrant fees start at $100-million and go up. Show support documentation that tends to lend credence demonstrating asset instrument legitimacy where even heads of state appear signed verifying such as true.
Suggesting IBC Account Conduits
Second (2nd): the NOC agent arranges with the banks to receive depositor’s millions for ‘broker transaction fees’ by suggesting to banks they “network” together, and for the bank to successfully participate it should consider linking-up with other independent offshore banks by banding together as a network of satellite banks to invest all depositor account monies for these assets to be used in high-yield trading programs. By the banks tying themselves to these asset instruments in joint venture contract agreements with trade representatives of international business companies (IBCs) the bank will automatically be set up to receive its trading profits in a variety of ways, which is basically the foundation each bank established for themselves to be conduits of money being passed through each other. All the banks did was see money compiled from depositor monies for the ‘trading broker (NOC agent) transaction fees’ and the ‘trading program entrant fees’ paid so the banks could begin participation in the planned receipt of what the NOC agent had convinced them to expect, which was high-yield trading profits. Depositor monies were sent into bank-client’s international business company (IBC) accounts, and from there, through a series of the trading broker’s (NOC agent’s) international business company numbered accounts. Meanwhile these targeted banks, now all linked together through bank wire money transfers, were convinced the trading process had begun so, they could see depositors ‘scheduled high-yield interest rates of return based on deposit size’ paid on-time. The banks counted their trading program profit chickens before the asset instrument egg placements into these ‘trading programs saw to hatching profits by the banks funding additional projects in order to scoop-up yet other high-value assets supplied by the NOC agent (trading broker) for placement into yet other high-yield trading programs. The trading program congame on the banks was then in full swing, as were depositor monies flying in the wings based on NOC agent commercial bank paper trading program profit promises to the banks sending money in and out of other banks to accomplish their goals too.
Strategic Delays & Excuses
Third (3rd): as trading program interval times come and go, according to NOC agent (trading broker) claims, banks are provided what appear to be plausible excuses as to why the trading program profit returns to the banks are taking longer as the most common excuse of all is that the trading profits are sent into escrow accounts handled between big banks and lawyers before disbursements can be legitimately realized by the trading broker’s (NOC agent’s) client banks awaiting pay-outs where the infamous word “soon” is often relayed all the way down the line in furtherance of the NOC agent fraud against the bank, which never appears seen by bank customer’s, just what ‘they’ hear coming from the banks where their monies were deposited. If the bank tires of excuses and demands their monies back, simply offer them additional asset instruments in the millions as an incentive to just hang-on a while longer until the trading profits clear escrow accounts in a month or so.
News Tip Bank Distractions
Fourth (4th): simply place a rumor in the financial business world that specific bank(s) are experiencing difficulties returning interest to depositors, which will see the targeted bank(s) desperately scrambling to answer attorney letters as the beginning stages of lawsuits from depositors. In that wake, slip the first (1st) NOC agent out of the picture entirely, making him unavailable (overseas on business but returning “soon”) to return calls to the bank(s).
Changing Of The Guards
Fourth (4th): send-in the second (2nd) NOC agent as a highly-respected trading and/or securities consultant recommended by one of the inside bank consultants, recruited earlier to perform ‘authorized signatory functions’ over the high-value asset instruments structured within joint-venture contract agreements signed by the bank with other IBCs. Offer the bank a potential bailout from an unidentified cash-cow group by stating that it is a secret consortium of European businessmen interested in buying-up independent banks with the help of the trading consultant (NOC agent). Freely consult with the primary bank (for a network of sub-banks) chief executive officer that the bank problems could be why it isn’t receiving trading profits as promised. Caution the executive that they must act fast because if the high-value asset instruments are counterfeit, fraudulent, or in any way worthless by means of perhaps yet an unknown secret secondary assignment the bank may have known nothing about earlier, that the chief executive officer may end-up taking the fall and going to prison for a very long time unless something isn’t done right away to counter it to save the bank(s). Again, freely offer to discreetly check the legitimacy of ‘all high-value instrument documentation’ only to be reviewed by very secret experts in Europe who happen to owe this NOC agent consultant special favors he can call-in.
Fifth (5th), the bank tiring of NOC agent #1 not returning their calls, adverse news publicity, and the first lawsuit filed by a depositor over lost monies, will instantly become a prime target of U.S. government investigative bodies. All NOC agent #2 does is makes his or her self, available to assist the government in any way they possible, meanwhile all the bank(s) asset instruments are in the possession of NOC agent #2.
Cultivating Bank Mules
Sixth (6th), NOC agent #2 calls the bank executive to Europe claiming what he discovered cannot be discussed over the phone. Once the bank officer is in Europe at the designated hotel meeting place, the trading consultant (NOC agent #2) informs the bank executive that ‘he’ (the ‘bank executive’) is in big trouble with the U.S. government and that if he does not fully cooperate with him he’ll eventually be charged with international fraud and money-laundering and then nothing can be done for him or the bank. Once the bank executive is convinced that it’s either the consultant’s (NOC agent’s) way or no way he’ll have been primed and ready for the next stage.
Convince the bank executive that only one (1), possibly two (2) groups of the bank high-value asset instruments can possibly be worked, but only with his dedicated cooperation to see the bank saved as well as himself but that only he (the executive) can guarantee his own success by the level of cooperation he’s willing to extend. Once the bank executive agrees then NOC agent #2 convinces him to sign a ‘personal confidentiality agreement’ with the consultant, which also makes him a part of the secret European consortium answerable to prosecution should he ever decide to breech such a contract in the future.
With the lead bank executive’s cooperation contacting the authorized signatory on behalf of the bank holding the specific high-value asset instruments that are designated by NOC agent #2 as being “workable” the bank executive and NOC agent #2 (consultant) go forward to see to the removal and reconstitution of what had been previously tied to the bank(s) as high-value asset instrument commercial bank paper(s).
Convincing Asset Holders
Seventh (7th): NOC agent #2 contacts the true holder of the high-value asset instruments and calls a meeting with the actual asset holders, explaining that they are about to lose their entire assets behind the unscrupulous financial business deeds of an independent offshore bank currently seen in news reports, under federal investigation, and about to be seized by the tiny government in which it is currently situated. Indicate that having been concerned by what was about to unfold, steps were taken to protect their assets, and that a plan is available to them should they care to act quickly before they lose everything. That the plan can only be successful through their full cooperation and that all NOC agent #2 (consultant) wishes from his work is his usual and customary fee of one percent (1%) on the amount involved where portions of that fee may be spread out over a schedule of cash, monetary instruments, and re-investment into a Trust benefiting all interested parties over a lengthy period of time. That through a careful process of transforming previously held asset instruments with the holding bank and its client bank through another Estate Fund Trust controlled by their own collective Board members that such would alleviate unnecessary publicity and the loss of their assets already in-place at the current time. And, finally that none of their banks need be concerned that it is only a collective Board decision to re-assign assets while allowing existing banks to maintain current governance over the same assets with minimal loss.
Bank in Liechtenstein (BIL) Trust fund accounts for NOC agent #2 and participant Trustee and legal guardians would see immediate benefits to establish all that necessary arrangements for receipt of such a transaction entrusted to them by NOC agent #2.
CIA NOC Agents On-Loan To FBI: Heavy Tippers
Nine (9th), NOC agent #2 notifies his handler (Washington DC metroplex area) that any and/or all traces of the high-value asset instruments have been successfully shielded from view and that the FBI may now proceed with new information as to who specifically are not to become targets of a federal investigation and should be called as cooperative witnesses to testify against who NOC agent #2 identifies as criminal co-conspirators causing depositor’s monies lost based on fraudulent claims to high-value asset instruments bank executives have no proof ever existed, and for the bank executives seeing to the establishment of IBC bank money transfer accounts as nothing more than money-laundering devices.
1.) Robert Earl Palm, under U.S. government sanction for his planned cooperation, saw to injecting the vast majority of all high-value asset instruments into FIBG LTD. bank via joint venture agreement contracts involving international business companies (IBCs) he controlled - but not necessarily named on - with his vociferous claim to Van A. Brink and others, these assets would be placed into trading programs netting extremely high-yield interest trading profits back to FIBG LTD. bank, in-exchange for which he saw receipt of millions of FIBG LTD. bank and it’s network of sub-banks depositor’s monies going into numbered accounts. Everyone wanted to place money in the banks offering high-yield returns in Robert Earl Palm’s claimed trading program profit pay-offs to these banks; and,
2.) Gabriel Francis MacEnroe, under U.S. government sanction for his planned cooperation, threatened FIBG LTD. bank former CEO Mark Kennedy (Vancouver, British Columbia, Canada) to cooperate in seeing FIBG LTD. bank high-value asset instruments separated from their past with assistance of authorized signatory William Randolph (“Bill”) Davis (Chino Hills, California, USA) and his associate Lewis (“Louis”) Trotta (San Francisco, California) whom met with Alan Eigher in Jakarta, Indonesia for said Indonesian high-value asset instruments conversion process to begin.
The MacEnroe-FBI extortion against FIBG LTD. bank CEO Mark Kennedy worked, as did the transformation, details of which are too lengthy to describe, but enabled MacEnroe to collect his usual and customary one-percent (1%) commission fees by arranging it all.
FIBG LTD. bank Board of Directors were told a so-called “new asset” seen by MacEnroe within his European takeover group was willing to act in an effort to shore-up their bank, however MacEnroe had already instructed FIBG LTD. bank CEO Kennedy to divest itself of that $8.7-billion high-value asset instrument earlier without other members of the Bank Board of Directors knowledge. In-fact, the “new asset” was basically derived from the $8.7-billion FIBG LTD. bank high-value asset instrument linked to Indonesian heritance Estates tied by their Holder’s authorized signatory holding Power Of Attorney at act as was demonstrated in a Joint Venture contract agreement between international business companies (IBCs) GENESIS HOLDINGS CORP. (Grenada) and its director Richard W. Downes who was also Chairman of the Board of Directors for FIBG LTD. bank, SHERWOOD INVESTMENTS (BAHAMAS) LTD. directed by Robert Earl Palm, BURL HOWARD SECURITIES CORP. directed by Robert Earl Palm, et al. and its CEO Alexander Gilbert Baraona, and FIRST INTERNATIONAL BANK OF GRENADA LIMITED bank.
After FIBG LTD. bank first CEO Brink resigned on October 1, 1999 and his successor CEO Kennedy resigned on July 4, 2000 and after his successor Acting CEO Lawrence A. Jones stepped aside, FIBG LTD. bank was seen with CEO Michael K. Gabriel contacted former CEO Kennedy who briefed him on what had transpired with the MacEnroe deal. CEO Gabriel then tried to salvage the MacEnroe deal when he wrote a 27-page letter to Lawrence A. Jones outlining, amongst other things, the MacEnroe deal once again, but on August 11, 2000 the Grenada government stepped-in and took control of FIBG LTD. bank, and went on to appoint two (3) Grenada government assigned Statutory Interim Administrators (Garvey Louison and Errol Thomas) in succession, and then appointed a Liquidator named Marcus A. Wide of PriceWaterhouseCoopers (Nova Scotia, Canada).
The Liquidator presented three (3) Statutory Interim Reports where the last report (July 2003) indicated no evidence existed that FIBG LTD. bank ever held any high-value asset instruments.
In January 2004, three (3) FIBG LTD. bank executives Robert John Skirving, Laurent E. Barnabe, and Rita Brunges Regale were arrested by FBI agents on charges of fraud and money laundering stemming from a federal indictment alleging the bank made fraudulent claims to having had high-value asset instruments where no evidence was found to exist.
On May 28, 2004 two (2) more FIBG LTD. bank executives, whom included Van A. Brink, were also arrested by the FBI agents on charges of fraud and money laundering stemming from a federal indictment alleging the bank made fraudulent claims to having had high-value asset instruments where no evidence was found to exist.
On December 10, 2005 FIBG LTD. bank founder and first CEO Van A. Brink died prior to the group trial set for 2007.
Several U.S. federal ‘criminal’ and ‘civil’ cases (shown below) name Gabriel Francis MacEnroe who claims he can arrange IMF loans and bail out troubled banks by seeing them turned into IMF project banks - one of several cons he uses to gain his usual and customary fees of approximately one percent (1%) for arranging such transactions. Based on others who highly recommend him, his fees are consistently paid up-front. Even more consistently though, are hundreds of millions lost by independent investors after MacEnroe leaves the stage.
One particular case (further below) details activities from 1990-1992 where the FBI coordinated different roles for its informants, named:
Mercedes Travis, Esq. (exwife of, Robert Chiari);
Gabriel Francis MacEnroe; and,
William (“Bill”) P. Caraluzzi, Esq.
Worked in-concert, this case saw Ms. Travis’ law client John J. Voigt, et al. charged with federal criminal fraud, money-laundering, tax evasion, and criminal forfeiture after client’s investment monies disappeared as Mr. MacEnroe (at an office in Stamford, Connecticut) saw them earmarked for META TRADING AND FINANCIAL INTERNATIONAL (MTFI) placement into a trading program claimed tied to The Holy Roman Catholic Church through the EURO-AMERICAN MONEY FUND TRUST (EAMFT), headquartered in Europe with representative offices in the U.S. The scheme saw the name of the KNIGHTS OF MALTA tossed-about in claims they were participating too.
Over 2-1/2 years on this case alone MacEnroe and others dealing with EAMFT saw loan applicants and investor’s lose approximately $18,500,000 (USD) based on "self-liquidating" loans designed to repay what were supposedly tied to Master Collateral Commitments (MCC) involving high-value asset instruments as commercial bank paper for entry into ‘trading programs’ to net high-yield interest after supposedly poling funds of their investors.
FBI informant Gabriel MacEnroe (as above) has seen many-many U.S. criminal and civil cases involving monetary loss from fraud surrounding his and his named companies financial business deals, named in:
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1992 – (CIVIL) Dallas, Texas [CASE NO.: 3:92-CV-00033 or 3:92-CV-00331, naming: “GF MacEnroe” and “Abbey Finance & Mortgage Company Limited” (United Kingdom), William P Caraluzzi, Ralph A. Anderskow, et al.; $367,500.00 Fraud];
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1993 – (CRIMINAL) Trenton, New Jersey [CASE NO.: 3:93-CR-00300-0, naming: Gabriel MacEnroe, William P. Caraluzzi, Ralph A. Anderskow, Mercedes Travis, Solis (“Skip”) Alevy, Donald Anchors, et al.; $18,500,000.00 money-maundering and fraud. See, e.g. http://vls.law.vill.edu/locator/3d/July1996/96a1344p.txt ]
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1998 – (CIVIL) Newark, New Jersey [BANKRUPTCY CASE NO.: 98-44940, naming: “Commercial Capital Establishment (Liechtenstein)”, “CCE”, Willy Farah, et al.; In RE: 1995 $60,000,000.00 investment fraud];
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1998 – (CIVIL) New York, New York [NASD (National Association of Securities Dealers) CASE DATE: 01SEP98, In RE: Bear Stearns & Co. Inc. vs. “Gabriel MacEnroe”, “Commercial Capital Establishment”, “CCE”, et al.];
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1999 – (CIVIL) Newark, New Jersey [BANKRUPTCY ADVERSARY CASE NO.: 99-3010, naming: “Commercial Capital Establishment”, “CCE”, Willy Farah, et al. (Total Claims: $46,698,723.30];
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1999 – (CRIMINAL) Ft. Lauderdale, Florida [CASE NO.: 8:00-CR-00027, USA v. Womack, et al.; naming: “Gabriel MacEnroe”, et al.; $56,000,000.00 money-laundering and fraud.];
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2000 – (CIVIL) Newark, New Jersey [CASE NO.: 2:00-CV-00952, Raymond Keith Richards v. PNC Bank N.A.; naming: “Gabriel MacEnroe” and “Commercial Capital Establishment” (Vaduz, Liechtenstein and St. Gallen, Switzerland), et al.; $60,000,000.00 Diversity Fraud, See, e.g. http://www.njusao.org/files/fa0420_r.htm ];
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2000 – (CRIMINAL) Greenville, South Carolina [CASE No.: 8:00-CR-00697, naming: “Gabriel MacEnroe”, Joseph R. Silvestri, David Alan Morgenstern, Vernon W. Shiflett, et al.; Charges: conspiracy to defraud the government and aiding and abetting wire fraud $52,000,000.00]; Gabriel Francis MacEnroe status (June 20, 2003) Failure To Appear, Warrant issued, foreign-based U.S. federal fugitive, See e.g. http://www.savannahnow.com/stories/111002/LOCPonziScheme.shtml ];
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2001 – (CIVIL) San Diego, California [CASE NO.: 8:01-CV-01085, naming “Gabriel MacEnroe”, Ralph King, David Alan Morgenstern, Virgil Womack, Byron Z. Moldo, Robbie Stevens, Dante Orgolini, Peter A. Davidson, Scott J. Rein Esq., Patrick J. Evans Esq., Thomas R. Sestanovich Esq., Rein Evans & Sestanovich LLP, (fka) Dressler Rein Evans & Sestanovich LLP, law partnership and successor to Dressler, Rein, Evans & Sestanovich LLP; Securities Exchange Act];
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2002 – (CRIMINAL) New Orleans, Louisiana [CASE NO.: (UNDER SEAL), naming: “Gabriel MacEnroe”, et al.; In RE: San Diego, California CASE NO.: 8:01-CV-01085 (above)];
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2002 – (CRIMINAL) Albuquerque, New Mexico [CASE: USA vs. Powell Onen P’Ojwong (West Nile, Uganda and London, UK), Ian Burns (London, UK and Barcelona, Spain), “Gabriel MacEnroe” (St. Gallen, Switzerland), Ralph King, et al.; See, e.g. U.S. Attorney John Kelly (In RE: $4-million investment trading program, City Of Clovis New Mexico (City Manager, Terri McCully), and LOMORO SECURITIES account at CITIBANK Espana (Spain); Money-Laundering and Wire Fraud]; and,
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2003 – (CIVIL) Dallas, Texas [CASE NO.: 3:03-CV-01016, naming: “Gabriel MacEnroe” and “Commercial Capital Establishment”, et al. [Judgment: $2,282,287.50 Failure To Pay balance of $10,000,000.00 awarded by NASD (National Association of Securities Dealers) to BEAR STEARNS & CO. INC.; CASE (01SEP98)]
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Interested parties who encounter Gabriel MacEnroe are encouraged to contact:
U.S. DEPARTMENT OF JUSTICE – Criminal Division
10th and Constitution Avenue North West
Washington, DC 20530
TEL: (202) 616-9871
CONTACT: Mr. James Pavlock
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Prior to Gabriel MacEnroe having occupied an office in Stamford, Connecticut during the early-1990s, he occupied another office in Beverly Hills, California during the late-1980s that was seen shut down in the wake of missing investor client monies after a complaint spurred an investigation by the U.S. Office Of Thrift Supervision.
MacEnroe is man with at least three (3) passport citizenships who is said to be a prolific writer and record keeper of information on almost everything discussed with him by anyone, which may speak loudly as to why the F.B.I. has used him internationally and in the United States as their financial business informant on more than just one (1) occasion. MacEnroe’s rise to infamy through nefarious financial business activities has built the small fortune he’s been able to amass during 15-years of dedicated but most curious service to governments around the World.
He is what some consider a Non-Official Cover (NOC) government intelligence foreign agent seen claiming to others that he can help provide International Monetary Fund (IMF) loans to banks, can arrange private placement investments for involvement in high-yield trading programs, provide credit enhancements, etc., etc.
In October 2000, MacEnroe saw a U.S. federal criminal indictment (see copy of indictment further below) against him report claims he operates with the following U.S. government agencies, to wit:
U.S. Treasury Department;
Federal Bureau of Investigation (F.B.I.);
Central Intelligence Agency (C.I.A.);
National Security Agency (N.S.A.); and,
Federal Reserve Board (FED).
His criminal indictment also revealed his father (London, UK barrister assigned as Trustee for the now-late John Paul Getty Jr. II) had been a collector of information for the F.B.I. as well.
EAMFT represented it had large sums of money available for private investment lending and this was one means by which The Holy Roman Catholic Church made considerable money from the interest earned on loans for funding some of its operations.
MacEnroe had a number of proposed loans at the time for various projects of people who had been presented to him seeking loans. The people put up ‘advanced fees’ to the EAMFT group, and after due diligence completion, loan documents were entered into. No projects were funded by EAMFT because the group who said it represented EAMFT ran off with the money instead, which was never recovered.
MacEnroe’s 1991 business partner Ralph A. Anderskow and John J. Voigt were arrested, convicted, sentenced to federal prison.
Gabriel Francis MacEnroe, William P. Caraluzzi, and Mercedes Travis walked away free.
The $18,500,000.00 was never recovered.
Ralph A. Anderskow was released from federal prison in 2002.
John J. Voigt has his federal prison release set for 2007.
The F.B.I. Atlantic City, New Jersey field office saw FBI Special Agent Alvin Powell investigate the case and handle its informants.
Powell retired on what was believed to be a disability pension due to a back injury.
414 Tryon Avenue [street name, may be: “Tyron”]
Englewood, New Jersey 07631
TEL: (201) 816 - 8290
Highlights (below) of the EURO-AMERICAN MONEY FUND TRUST (EAMFT) and META TRADING AND FINANCIAL INTERNATIONAL (MTFI) federal investigation case from the eyes of the federal Court:
Criminal Docket No.: 3:93-CR-300-0
Original Case No.: 93-CR-00300-ALL
Revised Case No.: 93-CR-00300-GEB
Case Filed: 06/14/93
Case Assigned to: Judge Garrett E. Brown, Jr.
U.S. District Court
District of New Jersey (Trenton, New Jersey)
USA v. VOIGT, et al.
JOHN J. VOIGT (1),
RALPH A. ANDERSKOW (2),
Mercedes Travis (3),
Donald Anchors (4),
Solis Alevy (aka) Skip Alevy (5),
. . . [EDITED-OUT FOR BREVITY] . . .
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
UNITED STATES OF AMERICA
RALPH A. ANDERSKOW, Appellant
UNITED STATES OF AMERICA
DONALD ANCHORS, Appellant
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Criminal Nos. 93-cr-00300-02 & 93-cr-00300-03)
Argued January 25, 1996
Before: COWEN and SAROKIN, Circuit Judges, and POLLAK, District Judge
(Filed July 9, l996)
Richard F. X. Regan, Esq. (ARGUED)
Hayden, Perle and Silber
1500 Harbor Boulevard
Weehawken, New Jersey 07087
COUNSEL FOR APPELLANT ANDERSKOW
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Michael M. Mustokoff, Esq. (ARGUED)
Teresa N, Cavenagh, Esq.
Judith E. Baylinson, Esq.
Duane, Morris & Heckscher
One Liberty Place
Philadelphia, PA 19103
COUNSEL FOR APPELLANT ANCHORS
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Allan Tananbaum (ARGUED)
United States Attorney
970 Broad Street
Newark, New Jersey 07102
COUNSEL FOR APPELLEE
OPINION OF THE COURT
COWEN, Circuit Judge.
Ralph Anderskow and Donald Anchors appeal from judgments of conviction and sentence entered by the District Court for the District of New Jersey. The convictions arise out of their participation, along with several other co-conspirators, in the Euro-American Money Fund Trust (the "Trust"), an entity that was used to perpetrate a pernicious advance-fee scheme. Over a 3-year period, the Trust bilked unsuspecting loan applicants and investors out of over $18-million dollars. Both defendants raise evidentiary and legal sufficiency challenges. We will affirm the judgments of conviction.
John Voigt was the mastermind of a scheme to obtain fees from loan applicants and potential investors for nonexistent loans and investments. At the heart of this scheme was the Trust. Voigt fabricated a fictitious genealogy for the Trust, claiming that it was a long-established European financial institution affiliated with the Catholic Church and the Knights of Malta, and that it had access to billions of dollars. For two and one-half years brokers for the Trust would recount this false genealogy to unsuspecting loan applicants and investors, who would part with substantial fees in return for "self-liquidating" loans (loans that repaid themselves) and "Master Collateral Commitments" ("MCCs"), allegedly a special form of commercial paper available only to banks.
Voigt benefited from the cooperation of several co-conspirators, including Anderskow, a partner at a Chicago law firm who also was a certified public accountant. He was hired as the Trust's lawyer in the Chicago area, and his credentials helped provide the Trust with an appearance of legitimacy, which facilitated its attempts to lure loan applicants and potential investors. Anderskow's primary responsibility was providing guarantees to borrowers on behalf of the Trust and maintaining a client escrow account into which advance fees were deposited. Anderskow would immediately distribute fees that had been deposited into his escrow account according to Voigt's instructions, which violated the terms of contracts entered into with the loan applicants and investors. For his role in the Trust Anderskow received $995,000 in compensation.
In January of 1991 appellant Anchors was hired for the position of "loan oversight officer." Somewhat akin to a customer relations manager, Anchors was primarily responsible for responding to questions and complaints from customers of the Trust. Over time, Anchors devoted much of his time to placating loan applicants who had paid advance fees and were calling with increasing frequency to inquire as to the status of their loans. Anchors eventually responded to several hundred calls each month, assuring disgruntled borrowers that their loans were about to be funded. Eventually, Anchors began to tell some applicants that other loans had been funded, which he knew was untrue. Anchors received $325,000 for his participation in the Trust.
In June of 1993, a federal grand jury issued a 26-count indictment against Anderskow, Anchors, and their 3 co-conspirators - Voigt, Mercedes Travis, and Solis Alevy.
Alevy entered a plea of guilty, and became a government witness.
Subsequently, the grand jury issued a 28-count superseding indictment against the remaining 4 defendants, charging Anderskow and Anchors with conspiracy to commit wire fraud, wire fraud, and money laundering, and bringing criminal money laundering forfeiture allegations against them.
After a 3-month trial, a jury convicted Anderskow on all charges except 2 counts of wire fraud.
Anchors was convicted of conspiracy and 7 counts of wire fraud, but was acquitted of 7 other counts of wire fraud and 2 counts of money laundering.
Anderskow and Anchors were sentenced, respectively, to terms of imprisonment of 78 and 32-months.
This appeal followed.
. . . [EDITED-OUT FOR BREVITY] . . .
At trial the government had no direct proof of a tacit agreement among Voigt, Alevy, Anderskow and Anchors to engage in an advance-fee scheme. Accordingly, both defendants filed post-trial motions for judgments of acquittal contending that the government had failed to adduce sufficient evidence that they were knowing-participants in a scheme to defraud potential borrowers and/or
They appeal the district court's denial of those motions.
. . . [EDITED-OUT FOR BREVITY] . . .
Anderskow was convicted on ten counts of money laundering arising out of various transfers of funds from his attorney escrow account to Trust members, pursuant to Voigt's instructions, between July and October of 1991. He also was convicted on numerous counts of wire fraud relating to his actions during the same period.
. . . [EDITED-OUT FOR BREVITY] . . .
We think that even if Anderskow were correct that the government failed to establish that he was aware of the Trust's fraudulent nature when he first joined in March of 1990…
. . . [EDITED-OUT FOR BREVITY] . . .
As the government points out, the Trust Anderskow joined in March of 1990 had a "strong aura of unreality." Government's Br. at 77. It purported to sell "self-liquidating" loans; i.e., loans that did not have to be repaid. It also claimed to be a long-established European financial institution affiliated with the Catholic Church and the Knights of Malta, and that it had access to billions of dollars. Furthermore, loan applicants were required to sign bizarre confidentiality agreements that purported to bar customers from disclosing information about the Trust in ‘this life’ and the ‘hereafter’.
Loan applicants also were required to fill out peculiar personal questionnaires that asked if they could hold their breath under water or were flat footed, and they were asked to provide hair samples and blood tests.
Given Anderskow's status as a partner in a Chicago law firm and a certified public accountant, and in light of his initial questioning of Trust brokers as to whether the money was "clean," a rational jury was entitled to find that Anderskow was suspicious from the outset.
Furthermore, a rational jury could have accepted the government's argument that Anderskow's credentials provided the Trust with an appearance of legitimacy.
More significant, however, is that during 1990 no less than seventeen advance fees, which totaled $1.5-million, were deposited into Anderskow's escrow account. Despite the fact that not one loan was funded during that time Anderskow immediately would parcel out the money to the various co-conspirators.
By July of 1991, moreover, seventeen additional borrowers and investors had paid Anderskow advance fees totaling $6.5 million dollars, which Anderskow disbursed to his confederates.
Anderskow himself testified that during 1991 he received approximately twelve complaints per day from anxious loan applicants and investors inquiring about their money. Although he knew that not one loan or MCC had been funded, Anderskow continued to provide a plethora of false excuses intended to lull customers into believing that their money was forthcoming.
Even more damning was Anderskow's admission under cross-examination that by dividing up advance fees among the coconspirators, instead of retaining them in his escrow account, he knew in June of 1991 that he was violating his contractual and ethical duty to hold customers' funds until they had received their loans.
The evidence showed that Anderskow also lied to one borrower in the latter part of 1991, claiming that the Trust had funded loans in the past when, in fact, Anderskow knew that no such funding had occurred. Finally, the evidence of Anderskow's financial motive and willingness to cooperate is not seriously debatable.
In 1990 Anderskow earned $100,000 from the Trust, and in 1991 he received $437,000 that was more than 10 times greater than his 1989 income.
Anderskow mechanically complied with Voigt's directions as to how to disburse the advance fees in his escrow account among the various co-conspirators.
The government presented an overwhelming circumstantial case that by July of 1991 Anderskow had willfully blinded himself to the Trust's fraudulent activities.
. . . [EDITED-OUT FOR BREVITY] . . .
The following (below) was found, at:
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
UNITED STATES OF AMERICA
JOHN VOIGT, Appellant
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Criminal No. 93-cr-00300-1)
Argued January 25, 1996
Before: COWEN and SAROKIN, Circuit Judges, and POLLAK, District Judge
(Filed July 9, 1996)
Lawrence S. Lustberg (ARGUED)
Crummy, Del Deo, Dolan, Griffinger & Vecchione
One Riverfront Plaza
Newark, New Jersey 07102-5497
COUNSEL FOR APPELLANT
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Allan Tananbaum (ARGUED)
Office of United States Attorney
970 Broad Street, Room 502
Newark, New Jersey 07102
COUNSEL FOR APPELLEE
OPINION OF THE COURT
COWEN, Circuit Judge.
John Voigt appeals from a judgment of conviction and sentence entered by the District Court for the District of New Jersey. The conviction arises from Voigt's role as the mastermind of a pernicious "advance fee" scheme whereby Voigt, operating under the auspices of the Euro-American Money Fund Trust, would obtain substantial fees in advance from, respectively, unsuspecting loan applicants and potential investors for various loans and investments that never materialized.
Over a 3-year period the Trust took in a total of 18.5-million dollars.
Of Voigt's eight (8) assignments of error, two (2) significant constitutional questions are presented for our review.
The first is whether the government's use of ‘acquitted co-defendant Mercedes Travis’, who Voigt alleges was counsel to the Trust and to him personally, as a confidential informant against him constitutes "outrageous government conduct" in violation of the Fifth Amendment's Due Process Clause.
The second is whether the district court violated Voigt's Sixth Amendment right to counsel of choice when, citing potential conflicts, it disqualified a third (3rd) attorney Voigt sought to add to his defense team without holding a formal evidentiary hearing.
We also confront several questions of first impression in this Circuit pertaining to the money laundering statute, 18 U.S.C. Section 1956(a)(1), and its forfeiture counterpart. Id. Section 982.
We must decide whether those statutes require formal "tracing" where laundered funds have been commingled in a bank account with untainted funds.
We also must determine what is the proper burden of persuasion for forfeiture proceedings under 18 U.S.C. Section 982, a question we have addressed previously in two (2) other contexts. See United States v. Pelullo, 14 F.3d 881 (3d Cir. 1994) (RICO; reasonable doubt); see also United States v. Sandini, 816 F.2d 869 (3d Cir. 1987) (CCE; preponderance).
Finally, Voigt contests the legal sufficiency of his convictions for tax evasion under 26 U.S.C. Section 7201, and challenges the orders of the district court requiring him to make restitution in the amount of $7,040,000 and refusing to grant his motions for severance.
For the reasons we set forth below, we will affirm Voigt's conspiracy, money laundering and tax evasion convictions, along with the order of restitution, in all respects.
We will vacate the judgment insofar as it incorporates an erroneous order of forfeiture and remand for further proceedings consistent with this opinion.
John Voigt was the mastermind of a scheme to defraud loan applicants and potential investors by inducing them to pay substantial "advance fees" for nonexistent loans and investments.
To implement this scheme, Voigt created two (2) fraudulent entities:
Euro-American Money Fund Trust, and
Meta Trading and Financial International
[hereinafter collectively referred to as "the Trust"].
Voigt fabricated a fictitious genealogy for the Trust, claiming that it was a long-established European financial institution affiliated with the Catholic Church and the Knights of Malta and that it had access to billions of dollars.
Voigt also falsely claimed that the Trust's headquarters was located in Paris, France, and that he was the U.S. Director.
To facilitate the scheme Voigt used various aliases and required loan applicants to fill out bizarre confidentiality agreements that purported to bar customers from disclosing information about the Trust in ‘this life’ and the ‘afterlife’.
The scheme operated from early-1990 until mid-1993.
Brokers for the Trust recounted the false genealogy Voigt had concocted to unsuspecting victims. At first, the Trust marketed only "loans." These multi-million dollar loans were supposedly
self-liquidating, which meant that, in return for a fee that ranged into the hundreds of thousands of dollars, customers would receive a loan that they did not have to repay. As soon as the fees were received they were distributed among the coconspirators.
Eventually, the Trust began to market "Master Collateral Commitments" ("MCCs"), bogus financial instruments that were touted as special promissory notes issued by banks and available only through the Trust.
They were marketed to unsuspecting investors for $3.5-million to $4.5 million dollars with the representation that they eventually would yield hundreds of millions of dollars.
All told, Voigt's 3-year gain from marketing self-liquidating loans and MCCs was approximately 7.5-million dollars.
On December 13, 1993, Voigt and four (4) alleged co-conspirators - Skip Alevy, Mercedes Travis, Ralph Anderskow, and Donald Anchors - were charged in a 28-eight-count superseding
The indictment charged Voigt personally with 1 count of conspiracy to commit wire fraud, 15 counts of wire fraud, 4 counts of money laundering, 2 counts of tax evasion, and criminal forfeiture allegations arising out of the money laundering counts.
After a 3-month trial, a jury convicted Voigt of all counts except one count of wire fraud. After a non-jury proceeding at which the district court ordered forfeiture of certain automobiles and pieces of jewelry, the court sentenced Voigt to a term of imprisonment of 188-months (15-1/2 years) and ordered him to make $7,040,000 in restitution.
This appeal followed.
Voigt challenges the judgment against him on 8 grounds. He argues that:
(1) The government's use of his alleged attorney, Mercedes Travis, as an informant violated his Fifth Amendment due process rights and his Sixth Amendment right to effective assistance of counsel;
(2) The district court erred in disqualifying one of his attorneys due to a potential conflict of interest without first making sufficient findings of fact, in violation of his Sixth Amendment right to counsel of choice;
(3) There was insufficient evidence to support his conviction on money- laundering counts 25 and 26;
(4) the forfeiture order should be vacated because the district court failed to require the government to prove beyond a reasonable doubt that the forfeited items were "traceable to" laundered money;
(5) His convictions on the tax evasion counts should be vacated because the government failed to prove an affirmative act of evasion as required by statute;
(6) The district court erred in imposing an order of restitution without making findings of fact regarding his ability to pay;
(7) The district court should have granted his motion for a severance because his co-defendants asserted defenses antagonistic to his own; and
(8) The district court erred in increasing his Guidelines offense level by 2 points for obstruction of justice.
. . . [EDITED-OUT FOR BREVITY] . . .
OUTRAGEOUS GOVERNMENT CONDUCT
Voigt argues that the government infringed his Fifth Amendment right to due process by recruiting his attorney as a government informant "in deliberate and flagrant disregard for the attorney-client relationship." Voigt's Br. at 10.
The premise of this claim is that codefendant Mercedes Travis, with whom the government had extensive investigative contacts, was his personal attorney during the time of the investigation.
The precise nature of Travis' relationship with Voigt and with the government, however, is in dispute.
The relevant facts are as follows.
Mercedes Travis began working for the Trust in August 1990.
Voigt contends that she was engaged as an attorney at that time, and points to an engagement letter that supports his claim.
The government, however, maintains that it justly and reasonably believed that Travis was not and had never been an attorney for the Trust.
In any event, by Travis' own account, she became concerned about the legitimacy of the Trust and feared that she herself was being defrauded. As a result, she left her post in Europe and approached the FBI with her concerns.
In June and July 1991, she met with Special Agent Alvin Powell and voluntarily provided him with a package of relevant documents. Those documents indicated that the Trust was engaged in a fraud.
Over the course of a three-day interview at a New Jersey motel in mid-July of 1991, Travis detailed the fraud for Powell.
Noting that Travis was an attorney, and having seen a letter on Trust letterhead purporting to appoint Travis as attorney for the Trust, Powell asked Travis whether she had acted in a legal capacity for the Trust.
Travis indicated on several occasions that she had not acted as a legal representative for the Trust but, rather, that she had been primarily responsible for initiating and maintaining contacts with banks.
Travis also insisted that the letter purporting to appoint her as an attorney for the Trust was false.
Travis indicated that she went to work for the Trust in 1990, first in the U.S. and later in Europe, believing it to be a bona fide financial institution.
Over time, however, she discovered that, notwithstanding Voigt's contention that the Trust possessed $75-billion in assets, the Trust was simply a shell corporation with few assets.
Travis then related that the Trust was engaged in an advance-fee scheme for loans in which fees were paid but no loan was ever funded.
Based on Travis' allegations, and on Powell's belief that she had not represented the Trust or its members in a legal capacity, Powell enlisted the assistance of Travis.
Powell devised a pretext whereby Travis would re-ingratiate herself with the Trust by falsely informing Voigt that she had negotiated an MCC.
Powell hoped that this would lead Voigt to divulge further information about the Trust's activities.
Powell eventually had Travis officially designated as a "cooperating witness" on the FBI's records. Having enlisted Travis as an informant, Powell asked her to sign a document allowing the consensual recording of her conversations with Trust members, including Voigt. In that document, however, Powell carefully noted that the purpose of the recordings was to corroborate her statements, based on the understanding that she had not acted, and would not act, as an attorney for the Trust or any of its members.
In September of 1991, Travis made 3 supervised calls from the FBI office in New Jersey, although apparently none involved Voigt or his co-conspirators.
In October of 1991, Travis informed Powell that she had been invited to Europe by someone associated with the Trust.
Powell asked her to maintain contact with him, and she called once during her trip to inform Powell that she had met with Voigt, but that they had discussed only personal matters.
When Travis returned from Europe, Powell met her in an Atlantic City hotel, where she provided him with several cassette recordings of conversations, documents obtained during the trip, and information acquired by talking with Voigt.
Travis was still convinced that the Trust was engaged in a fraud.
According to Powell's version of the meeting, Travis indicated that she had not performed legal work for the Trust or Voigt during her trip to Europe.
In February of 1992, Travis informed Powell that she had prepared a tax opinion for Voigt. She claimed it was a "one-shot deal," and that it concerned Voigt and not the Trust, but she did not share the substance of the opinion with Powell.
Powell had no prior knowledge that Travis would be providing legal advice to Voigt.
In March of 1992, Travis advised Powell that she had persuaded Voigt to let her become the Trust's attorney, but that her role would be to facilitate communications between the Trust
and other entities.
Powell became concerned about this latest development because of potential attorney-client privilege problems and because Travis herself might become an active participant in what she had insisted was a fraud.
He therefore instructed Travis to meet with Assistant United States Attorney ("AUSA") Paul Zoubek, who was supervising the investigation.
Travis replied that she would inform Powell if her status changed from facilitating loans
and investments to providing legal advice.
Travis next called Powell on March 10  to inform him that she indeed had been appointed
as attorney for the Trust.
Powell again warned her about acting in a legal capacity and warned her not to engage in any illegal activity.
He also gave her a firm date for their meeting with AUSA Zoubek.
In another telephone call 2-days later, Powell again instructed Travis not to act as an attorney, and she reassured Powell that the information she was providing raised no issue of privilege.
On March 25, 1992, Travis and Powell met with AUSA Zoubek at the U.S. Attorney's Office in Newark.
After listening to Travis recount her version of the events, AUSA Zoubek pointed out the stark inconsistency between her original allegation that the Trust was a fraud, and her recent decision to rejoin the Trust as its attorney.
Travis indicated that she wanted to determine for herself whether in fact the Trust was legitimate and would inform the government of her findings within 2-weeks.
AUSA Zoubek nevertheless told her that she would be on her own, and that any time spent in Europe working for the Trust would not be as a government informant due to potential privilege problems.
According to Zoubek, as verified by Powell's notes of the meeting, the only way that information otherwise privileged could be provided to the government would be if the crime-fraud exception were deemed to be applicable.
Travis indicated that she understood.
At the same time, however, Powell instructed Travis to report to him as to whether the Trust had sufficient funds to cover its existing loan commitments.
From the time of their last meeting on March 25, 1992, until May 1, 1992, Powell did not hear from Travis, but received information indicating that she was participating in the same type
of fraudulent conduct that originally had motivated her to come forward to the FBI.
On May 1, 1992, Travis made 2 separate calls to Powell from Europe.
Her first call, which Powell maintained was unsolicited, was from a pay phone because, according to Travis, she was afraid her calls were being monitored.
Travis again told Powell that the Trust had no funds to lend, and that she would make her "official" call later that day.
In her 2nd call, Travis indicated that she was representing Voigt in connection with 2 Grand Jury subpoenas for records of the Trust that Powell had served on Voigt.
At trial, however, Travis testified that at that point she was representing only the Trust, and that attorney James Binns was representing the Trust and its directors for purposes of the criminal investigation.
Powell advised Travis that she and Voigt should appear at the FBI office to discuss the matter.
It was not until sometime after this May 1, 1992 call from Travis that Powell had Travis officially taken off the books as a confidential informant.
Travis did not contact the government again until September of 1992, when Travis called AUSA Robert Ernst (who had taken over the investigation) to discuss grand jury subpoenas that
had been served on the Trust in August .
Travis informed Ernst that she was representing the Trust in connection with the subpoenas.
Before any further discussion occurred, Ernst informed Travis that she was a target of the investigation and, given her earlier contacts with the government, that she had a conflict of interest and should withdraw as counsel for the Trust.
AUSA Ernst documented this admonition in a letter sent to Travis 8-days later.
On November 6, 1992, Travis again made an unsolicited call to Powell, warning him that an unsuspecting potential customer was about to transfer $21-million to the Trust and asking him to stop the transaction.
In response to a question by Powell, Travis indicated that she was not represented by counsel.
After reiterating that Travis was a target, Powell asked Travis whether she would appear voluntarily before a Federal Grand Jury. Travis agreed to testify.
After Travis had arrived in Newark, but prior to her grand jury testimony, she met with Powell and AUSA Ernst.
Ernst repeated that Travis was a target, and informed her of her rights. Ernst warned Travis not to disclose any confidences between her and any person affiliated with the Trust because of potential attorney-client privilege issues, and stated that he would not ask any questions that would risk eliciting potentially privileged information.
In fact, when Travis indicated that she had brought Trust documents with her to turn over to the
government, Ernst refused to examine them.
Notwithstanding Travis' insistence that the documents were not privileged because the Trust
did not actually exist, Ernst turned them over to an Assistant U.S. Attorney (AUSA) who was not part of the investigation into the Trust to make an independent privilege determination.
Before the grand jury, Travis again was informed of her rights and that she was a target of the investigation. She was again admonished not to disclose privileged information, and when it appeared that she was about to do so, Ernst instructed her not to answer.
On January 12, 1993 Ernst wrote to Travis informing her once more that she was a target of the grand jury's investigation and invited her to provide additional testimony or evidence in her own behalf, which she did on January 15, 1993.
Contending that the government's reliance on Travis to build a case against him constitutes "outrageous government conduct" in violation of the Fifth Amendment's Due Process Clause, Voigt moved pretrial to dismiss the indictment.
The district court declined to hold an independent evidentiary hearing because it determined that Voigt had failed to make a prima facie showing of outrageousness and the trial would address the issues raised by his motion.
The district court ultimately denied Voigt's renewed post-trial motion to dismiss the indictment:
“[A]s far as outrageous conduct by the Government, I certainly can't find that here. I have had the benefit of seeing Agent Powell testify, I have seen Mercedes Travis testify - and the cross examination of both of them - and I can't find that that was the case.
To the extent there is any conflict between the testimony of Powell and Travis, I credit the testimony of Powell . . . because Powell convinced me that the Government was acting reasonably based upon what Travis had told them when they went forward, even though she was an attorney, that she was not acting as an attorney.
I can't find any outrageous conduct whatsoever here and, of course, we know later, Travis was not a Government agent, [and] was really acting on her own at the time.
I can't see any outrageous conduct whatsoever and I have had the benefit of the full trial hearing on this.”
App. at 1122-23.
Our standard of review is mixed. When the district court decides a constitutional claim based on a developed factual record, we exercise plenary review of the district court's legal conclusion. United States v. Driscoll, 852 F.2d 84, 85 (3d Cir. 1988). We defer to the factual findings supporting that conclusion unless they are clearly erroneous. United States v. Bonanno, 852 F.2d 434, 437 (9th Cir.), cert. denied, 488 U.S. 1016, 109 S. Ct. 812 (1989).
In 1952 the Supreme Court recognized that outrageous
misconduct by law enforcement officers in detecting and obtaining
incriminating evidence could rise to the level of a due process
violation. Rochin v. California, 342 U.S. 165, 72 S. Ct. 205
(1952) (vacating conviction and dismissing indictment where police
had pumped stomach of suspected drug pusher to obtain incriminating
evidence). Since Rochin was decided the Court has discussed the
viability of an outrageous government conduct claim only in the
context of government instigation of and overinvolvement in the
very criminal activity it seeks to punish. See United States v.
Russell, 411 U.S. 423, 93 S. Ct. 1637 (1973); see also Hampton v.
United States, 425 U.S. 484, 96 S. Ct. 1646 (1976) (five Justices
reaffirm viability of due process claim for government
overinvolvement in crime). In United States v. Payner, 447 U.S.
727, 100 S. Ct. 2439 (1980), however, the Court discussed, in
dictum, whether an illegal search of a third party's briefcase
might constitute outrageous government conduct. Id. at 737 n.9,
100 S. Ct. at 2447 n.9. Thus, we have no reason to doubt that the
Court continues to recognize a due process claim premised upon
outrageous law enforcement investigative techniques.
The showing required to establish a due process
violation, though often recited, is by no means pellucid. Writing
for the Court in Rochin, Justice Frankfurter said that "the
proceedings by which this conviction was obtained do more than
offend some fastidious squeamishness or sentimentalism about
combatting crime too energetically. This is conduct that shocks
the conscience." Rochin, 342 U.S. at 172, 72 S. Ct. at 209. In
Russell, the Court elaborated on the standard it had enunciated in
While we may some day be presented with a
situation in which the conduct of law
enforcement agents is so outrageous that due
process principles would absolutely bar the
government from invoking judicial processes to
obtain a conviction, the instant case is
distinctly not of that breed. . . . The law
enforcement conduct here stops far short of
violating that "fundamental fairness, shocking
to the universal sense of justice," mandated
by the Due Process Clause of the Fifth
Russell, 411 U.S. at 431-32, 93 S. Ct. at 1643 (citation omitted).
And in Hampton, the Court's most recent opportunity to visit the
outrageous government conduct issue, Justice Powell, concurring in
the judgment, noted that "[p]olice over-involvement in crime would
have to reach a demonstrable level of outrageousness before it
could bar conviction." Hampton, 425 U.S. at 495 n.7, 96 S. Ct.
1653 n.7 (Powell, J., concurring in the judgment).
We have also noted that the judiciary is extremely
hesitant to find law enforcement conduct so offensive that it
violates the Due Process Clause. In United States v. Janotti, 673
F.2d 578 (3d Cir.) (in banc), cert. denied, 457 U.S. 1106, 102 S.
Ct. 2906 (1982), we observed that "the majority of the Court has
manifestly reserved for the constitutional defense only the most
intolerable government conduct." Id. at 608 (emphasis added).
Relying on well-settled separation-of-powers principles, we cautioned that:
”[w]e must necessarily exercise scrupulous restraint before we denounce law enforcement conduct as constitutionally unacceptable . . . . Unless the behavior of the F.B.I. agents rose to the level of outrageousness which would bar conviction, the conduct of agents of the Executive Branch who must protect the public from crime is more appropriately considered through the political process where divergent views can be expressed in the ballot box.”
Id. at 607, 609.
Subsequent decisions have heeded Janotti's call for
judicial restraint. As a result, the doctrine of outrageous
government misconduct, although often invoked by defendants, is
rarely applied by courts. See United States v. Santana, 6 F.3d 1,
4 (1st Cir. 1993) ("The banner of outrageous misconduct is often
raised but seldom saluted."). Although litigants continue to
assert the doctrine as a defense against conviction, "courts have
rejected its application with almost monotonous regularity." Id.at 4
(collecting cases). Indeed, the doctrine has only once been
applied by a federal appellate court since the Supreme Court's
Hampton decision in 1976: in this court's decision in United States
v. Twigg, 588 F.2d 373 (3d Cir. 1978).
Since Twigg, however, "this court and other appellate courts have . . . exercised extreme caution in finding due process violations in undercover settings." United States v. Gambino, 788 F.2d 938, 945 n.6 (3d Cir.), cert.denied, 479 U.S. 825, 107 S. Ct. 98 (1986). See United States v. DeRewal, 10 F.3d 100, 105 n.3 (3d Cir. 1993), cert. denied, 114 S.
Ct. 1544 (1994).
Bearing in mind the amount of restraint we must exercise
in subjecting law enforcement conduct to judicial review, we must
determine whether, as a matter of law, the conduct that Voigt
alleges occurred in this case raises a cognizable claim of
outrageous government conduct. Despite the paucity of directly
relevant authority, we are not writing on a clean slate. Our
review of the case law demonstrates that a claim of outrageous
government conduct premised upon deliberate intrusion into the
attorney-client relationship will be cognizable where the defendant
can point to actual and substantial prejudice.
In United States v. Ofshe, 817 F.2d 1508 (11th Cir.),
cert. denied, 484 U.S. 963, 108 S. Ct. 451 (1987), for example, the
government used a defense attorney as an informant against the
defendant in a matter unrelated to the subject of the attorney's
representation (a drug prosecution). With the attorney's
permission, the government placed a body bug on him to record
conversations with the defendant. Despite strict instructions to
the attorney not to elicit privileged information, secret defense
strategy concerning Ofshe's drug prosecution was recorded by
government agents. Nevertheless, the Eleventh Circuit concluded
that this government misconduct was not so outrageous as to violate
the Fifth Amendment. Id. at 1516.
This conclusion was based on two (2) findings:
(1) That the attorney's cooperation concerned a different crime from the one for which he was representing the defendant, thus the invasion of the attorney-client relationship did not produce any evidence against the defendant; and,
(2) That the defendant was not prejudiced in his defense because the attorney's co-counsel continued to provide zealous representation to the defendant throughout the trial. Id.
The court noted, however, that "[h]ad there been demonstrable evidence of prejudice, we would
be compelled to reverse." Id. Accord United States ex rel. Shiflet v. Lane, 815 F.2d 457 (7th Cir. 1987) (dismissal not warranted where disclosure of privileged information to police lead to discovery of crucial evidence against defendant because government played no role in the breach of the privilege), cert. denied, 485 U.S. 965, 108 S. Ct. 1234 (1988); cf. United States v.
Levy, 577 F.2d 200 (3d Cir. 1976) (dismissal of indictment on Sixth Amendment grounds warranted where government employs co-defendant as confidential informant in order to obtain and reveal confidential defense strategy).
Only one decision has ordered that an indictment be
dismissed due to pre-indictment intrusion into the attorney-client
relationship so pervasive and prejudicial as to be considered
"outrageous." United States v. Marshank, 777 F. Supp. 1507 (N.D.
Cal. 1991). In Marshank, Ronald Minkin, the attorney for two
cooperating defendants, provided information to the government
leading to the indictment of another one of his clients. Minkin
then encouraged that client to cooperate with the government in
order to secure an indictment against Marshank, with whom Minkin
also had an ongoing attorney-client relationship. The government
never warned the attorney to avoid ethical impropriety, and
affirmatively hid from both the court and the defendants the
attorney's multiple, conflict-ridden representation while acting as
a government informant. Granting Marshank's motion to dismiss the
indictment based on a due process violation for outrageous
preindictment conduct, the district court distinguished between
passive tolerance and active encouragement of impropriety:
[T]he government actively collaborated with
Ron Minkin to build a case against the
defendant, showing a complete lack of respect
for the constitutional rights of the defendant
and Minkin's other clients and an utter
disregard for the government's ethical
obligations. . . . [T]he agents and the
prosecutor here never warned Minkin not to
engage in unethical behavior and in fact
facilitated that behavior by hiding it from
the defendant. Moreover, the government
colluded with Minkin to obtain an indictment
against the defendant, to arrest the
defendant, to ensure that Minkin would
represent the defendant despite his obvious
conflict of interest, and to guarantee the
defendant's cooperation with the government.
Id. at 1524 (second emphasis added).
Voigt claims that, at the very least, the factual disputes raised by his moving papers and the government's response warranted an independent evidentiary hearing prior to trial, and that the district court's determination that he had failed to make out a prima facie showing of "outrageous government conduct" was erroneous. The district court had before it:
(1) Agent Powell's affidavit, to which contemporaneous notes of his contacts with Travis were attached as exhibits;
(2) Voigt's affidavit, in which Voigt claimed that Travis had been the Trust's and his attorney from the summer of 1990 through June of 1993;
(3) Travis' affidavit; and,
(4) Travis' and Powell's grand jury testimony.
Although we agree with Voigt that conducting a hearing prior to trial would have been more prudent and the better practice, a remand is unnecessary under the facts of this case since we find that the record developed at trial, taken together with Voigt's moving papers and the government's response, provided the district court an adequate basis with which to resolve Voigt's constitutional claim.
Rule 12(b)(1) of the Federal Rules of Criminal Procedure
requires that all "defects in the institution of the prosecution"
be raised by pretrial motion. Fed. R. Crim. P. 12(b)(1). Although
Rule 12 does not by its terms specify when such a motion entitles
a defendant to a pretrial evidentiary hearing, we have held that a
defendant's moving papers must demonstrate a "colorable claim" for
relief. United States v. Brink, 39 F.3d 419, 424 (3d Cir. 1994)
(remanding for hearing where Brink alleged facts that, if true,
"could violate a defendant's rights under the Sixth Amendment").
See United States v. Soberon, 929 F.2d 935, 941 (3d Cir.) (if
district court had "reasonable suspicion" of prosecutorial
misconduct proper course was to hold evidentiary hearing), cert.
denied, 502 U.S. 818, 112 S. Ct. 73 (1991). In order to be
"colorable," a defendant's motion must consist of more than mere
bald-faced allegations of misconduct. United States v. Sophie, 900
F.2d 1064, 1071 (7th Cir.) ("A district court does not have to hold
evidentiary hearing on a motion just because a party asks for
one."), cert. denied, 498 U.S. 843, 111 S. Ct. 124 (1990). There
must be issues of fact material to the resolution of the
defendant's constitutional claim. See United States v. Panitz, 907
F.2d 1267, 1273-74 (1st Cir. 1990) (refusal to hold evidentiary
hearing on outrageousness claim proper because material facts were
not in dispute); Sophie, 900 F.2d at 1071 (refusal to hold hearing
proper where defendant's own submissions refuted his claim).
As our survey of the relevant case law indicates, see
supra III.B.2, in order to raise a colorable claim of
outrageousness pertaining to alleged governmental intrusion into
the attorney-client relationship, the defendant's submissions must
demonstrate an issue of fact as to each of the three following
elements: (1) the government's objective awareness of an ongoing,
personal attorney-client relationship between its informant and the
defendant; (2) deliberate intrusion into that relationship; and
(3) actual and substantial prejudice. See Ofshe, 817 F.2d at 1516;
Lane, 815 F.2d at 466; United States v. Santopietro, 809 F. Supp.
1008, 1015 (D. Conn. 1992) (no due process violation where
defendant fails to demonstrate that attorney/informant revealed
client confidences); Marshank, 777 F. Supp. at 1524.
Although the issue is a close one, after comparing
Voigt's motion and Travis' affidavit with the government's
response, we think the district court should have conducted an
evidentiary hearing. Travis' relationship with both Powell and
Voigt was highly disputed. Furthermore, Voigt's moving papers
raised enough of a specter of ethical impropriety on the
government's part to warrant closer scrutiny. Even the district
court, skeptical though it was as to the degree of purposeful
intrusion, believed that whatever factual disputes existed on that
issue would be resolved at trial. This was an acknowledgement by
the court that there were some disputed factual issues raised by
Voigt's motion that needed to be resolved. Since the government
itself notes that suppression of evidence is a more appropriate
remedy than dismissal of the indictment, factual determinations
that can lead to suppression logically should be resolved at an
evidentiary hearing conducted prior to trial.
Conducting a pre-trial evidentiary hearing certainly has
its advantages. The district court is then in a position to
place in the record its findings of facts and conclusions of law,
see Fed. R. Crim. P. 12(e), which greatly facilitates appellate
review. Prieto-Villa, 910 F.2d at 610. This is especially true
where the legal claim, outrageous government conduct, is so highly
fact sensitive. While we are not unmindful of the district court's
strong interest in avoiding duplicative proceedings, judicial
economy is not fostered when substituting trial testimony for a
pretrial hearing generates post-verdict and appellate litigation and
potentially frustrates appellate review.
Nevertheless, any "error" arising from the district court's failure to hold an independent evidentiary hearing in this case is unquestionably harmless.
Most of the factual issues depended for their resolution on assessing Powell's and Travis' credibility.
In our view, their trial testimony, when taken together with Voigt's motion papers and the government's response, provided the district court with a sufficient evidentiary record against which to measure Voigt's outrageousness claim.
At trial, Voigt cross-examined Powell thoroughly about whether he in fact believed that Travis had acted in a legal capacity on behalf of the Trust or Voigt when she first approached the government. Powell also was cross-examined extensively about the degree to which he encouraged Travis to reestablish contact with the Trust and whether it was his understanding that she would do so in her capacity as an attorney.
Travis testified in her own behalf and was cross-examined at length by the government as to her understanding of her relationship with Powell and her role as a confidential informant.
Finally, during the trial the district court ruled on numerous claims of attorney-client privilege, which certainly provided it with insight into the nature and degree of any alleged government intrusion into the attorney-client relationship. Thus, the district court's failure to conduct a hearing, although ill-advised, was at worst harmless error.
Voigt claims, however, that even assuming the record as it now stands is sufficiently developed, and we determine that it is, the district court should have dismissed the indictment because the record unequivocally demonstrates outrageous government conduct.
Relying on the 3-part test we set forth above, supra III.C.1.a, we hold that Voigt's claim of outrageousness fails as a matter of law with respect to the period between July 13, 1991 and May 1, 1992 because:
Voigt failed to establish the first (1st) element - the government's objective awareness of an attorney-client relationship between Travis and Voigt during that time.
We further agree with the district court's implicit determination that there is insufficient evidence in the record on the second (2nd) and third (3rd) elements, purposeful intrusion and prejudice, as to the period thereafter.
Voigt's claim of outrageousness based on the government's contacts with Travis during the period from July 13, 1991 (when Travis first approached the government), to May 1, 1992 (when
Travis first announced that she was representing Voigt in response to the grand jury subpoenas), fails as a matter of law for two (2) reasons.
First (1st), the record is wholly devoid of any evidence that the government was or should have been aware of a personal attorney-client relationship between Travis and Voigt during that time. Voigt argues that the tax opinion Travis prepared for him should have alerted Powell that by February or March of 1992 Travis had an ongoing personal attorney-client relationship with Voigt. According to Powell, however, Travis claimed that it was a "one-shot deal" and did not share the opinion with him. The district court credited Powell's version of the events, and we find nothing in the record to indicate that the district court's finding in this respect was clearly erroneous.
In any event, the record clearly indicates that at about the same time Travis informed Powell of the tax opinion AUSA Zoubek discontinued Travis as a confidential informant.
Voigt also argues inferentially that the government's entire case at trial was based on the premise that the Trust was essentially his "alter ego." Since the Trust was a fictitious entity, Voigt reasons, any legal work Travis performed for the Trust in reality must have been performed for him personally.
In this way Voigt attempts to bootstrap himself into an attorney-client relationship that is essential to the maintenance of his outrageousness claim, at least with respect to the period preceding
May 1, 1992.
Voigt cannot have it both ways.
Having abused the corporate structure such that the Trust, in effect, became his "alter ego," we think that Voigt may not now rely on that abuse as a shield by claiming a personal attorney-client relationship with the attorney for the fraudulent corporate entity. Moreover, far from creating additional protections for officers of fraudulent corporations, the "alter ego" doctrine exists to pierce the corporate veil, thereby stripping those officers of the protections normally associated with the corporate form. See generally Charles Clark, Corporate Law Section 2.4, at 71 (1986).
In any event, even if Travis' status as an attorney for the Trust were relevant to our resolution of the outrageousness issue, the record fully supports the district court's implicit finding that Powell reasonably believed that Travis was not acting as counsel for the Trust during the period between July 13, 1991 and May 1, 1992.
Accordingly, any claim of outrageousness must be premised upon the government's contacts with Travis after May 1, 1992 for that is the day Travis informed the government that she was representing the Trust and Voigt in connection with the very investigation in which she had acted as an informant.
As for Travis' contacts with the government from May 1, 1992 until her indictment, the record falls woefully short of establishing the sort of purposeful intrusion into her attorney-client relationship with Voigt that would rise to the level of outrageousness.
For example, Travis made two (2) phone calls to Powell on May 1 1992.
Contending that these calls were "staged" to maintain Travis' cover, Voigt asserts that they constitute proof of "purposeful intrusion." We are not persuaded.
First, by the time Travis placed these calls to Powell, AUSA Zoubek had affirmatively cut off contact with Travis given her decision to rejoin the Trust as counsel. This demonstrates the government's awareness of and sensitivity to Travis' ethical obligations and belies Voigt's sinister characterization.
Second, Powell asserted that he did nothing to solicit the calls, and the record supports his
contention. Thus, to the extent that Travis disclosed privileged information, and there is no proof that she did, it was not at the behest of government agents.
All of Travis' post-May 1, 1992, contacts with the government were unsolicited except for her appearances before the grand jury.
The government's actions during this period demonstrated sensitivity to potential ethical problems and contradicts Voigt's claim of "purposeful intrusion."
Illustrative of the government's sensitivity was Travis' call to AUSA Ernst in September of 1992. Ernst did not attempt to extract information from Travis. Instead, he informed her that she was a target of the investigation and admonished her to withdraw as counsel given her obvious conflict of interest.
Travis' next contact with the government was her unsolicited call to Powell in November of 1992 to warn him about an impending fraud. To the extent that such information was privileged, it was volunteered and cannot have constituted "deliberate intrusion" on the part of the government.
Similarly, we find no impropriety in Powell's asking Travis to appear before the grand jury. By this time Travis knew she was a target of the investigation and had been warned to withdraw as counsel for Voigt.
Therefore, to the extent Travis continued to provide legal advice to Voigt in connection with the criminal investigation, she was violating her ethical obligation to avoid a conflict of interest.
Finally, AUSA Ernst's efforts to steer clear of privileged information during Travis' grand jury testimony demonstrate that the government was attentive to ethical constraints.
We fail to see any purposeful intrusion on the government's part.
Voigt's alternative claim of purposeful intrusion, which arguably has some merit, might be that the government had an affirmative duty to inform him that Travis had acted as an informant when it discovered that she was representing him in connection with the very criminal investigation in which she had acted as an informant.
At least one court of appeals has speculated as to whether the government, during the investigative phase of a prosecution, may have some affirmative duty to inform a defendant of a potential conflict of interest caused by its prior association with the defendant's lawyer. See, e.g., United States v. Lopez, 71 F.3d 954, 963-64 (1st Cir. 1995) (attorney for defendant had begun grand jury investigation into his client as AUSA before switching sides).
We need not reach that issue, however, because as our discussion in the next subsection indicates, Voigt has made no showing of prejudice.
We find no evidence in the record of significant prejudice--the 3rd element of our outrageous government conduct test.
As the party bearing both the burden of production and persuasion on his outrageousness claim, Voigt has failed to demonstrate that he suffered any ill effects flowing from the government's allegedly improper investigative activity.
For instance, Voigt does not cite even a single occasion on which Travis gave him legal advice that was calculated to damage him to the benefit of the government.
Nor does he claim that Travis intentionally declined to assert the attorney-client privilege in response to the government's grand jury subpoenas or that Travis advised him to pursue a course of conduct she knew to be illegal simply to help the government build its case.
More significantly, however, Voigt failed to demonstrate that any of the information Travis provided the government after May 1, 1992, was in fact privileged.
We think this alone is fatal to his claim of outrageousness.
Voigt contends on appeal that he does not assail the district court's attorney-client privilege rulings because of the lenient standard of review we would apply. But we think if Voigt's assertion that "the evidence introduced both prior to and at the trial included hundreds, if not thousands, of privileged attorney-client communications" (Voigt's Br. at 12) had any merit whatsoever, he would have pointed to at least one document Travis provided the government that was privileged.
By failing to meet his burden to establish the privilege he claims, Voigt has precluded us from finding that an attorney-client relationship between Travis and him ever existed, let alone that it was violated.
Finally, Voigt invokes our decision in Levy, 577 F.2d at 200, along with other similar decisions, in an attempt to have us find that the government's intrusion into his attorney-client relationship, standing alone, is per se prejudicial. Levy, however, is distinguishable on two (2) fronts.
First, Levy was decided under the Sixth Amendment. Second, and more importantly, Levy, like most of the cases that Voigt has cited, concerned the government's deliberate intrusion into a defendant's attorney-client relationship in order to gain access to confidential defense strategy. See, e.g., United States v. Valencia, 541 F.2d 618 (6th Cir. 1976) (dismissal appropriate where government obtains defense strategy).
The record in this case demonstrates that the government was scrupulous in its effort to avoid procuring confidential defense strategy. See generally Ofshe, 817 F.2d at 1516 (no dismissal warranted where inadvertently intercepted defense strategy not used against the defendant).
If any privileged information was disclosed to the government in this case, it concerned the workings of the Trust, not Voigt's legal strategy in responding to the criminal investigation into his
Voigt's claim of severe prejudice amounts to little more than an argument that "where there's smoke, there must be fire." We find neither.
RIGHT TO COUNSEL OF CHOICE
Voigt claims that the district court's disqualification of James Binns, a third attorney he sought to add to his defense team, violated his right to counsel of choice under the Sixth Amendment. Voigt seeks per se reversal of his conviction on the theory that the manner in which the district court disqualified Binns was arbitrary.
The nature and extent of James Binns' relationship with the Trust, like that of Travis, is somewhat ambiguous and eludes precise definition.
An attorney who also was Voigt's long-time friend, Binns first came into contact with the Trust in April of 1992 when he was contacted by Travis and Voigt in connection with the government's investigation into the Trust. Shortly thereafter, he accompanied Voigt to the Linwood, New Jersey offices of the FBI and "attempted" to meet with Powell.
Binns then met with Anderskow regarding the grand jury subpoenas that had been served on him.
By Binns' own account, he told Anderskow that he would be acting as counsel for Voigt only, but would "facilitate the production of documents to the Government" in connection with Anderskow's subpoena.
In a June interview with the FBI, however, in response to the FBI's request to review certain documents, Anderskow apparently stated that Binns had been retained by the Trust and was representing Voigt, Anderskow, and any other Trust members who came under investigation regarding the activities of the Trust. Binns was not present at Anderskow's interviews, nor did he have any contact with the FBI around that time.
In June of 1992, Travis and Binns spent 5-days together in a New Jersey hotel assembling documents responsive to grand jury subpoenas that had been served on Voigt and Anderskow
Travis asserted that "Binns was operating in the role of attorney for the Trust and its various members" at that time; Binns maintained that Travis was the attorney for Voigt, Anderskow, and the Trust, and that she withheld many documents from Binns on grounds of attorney-client privilege with respect to those parties.
Binns and Travis also worked together that weekend and periodically until November of 1992, to devise Voigt's defense strategy.
According to Binns, he advised Travis numerous times that as a potential target of the grand jury's investigation she should seek a criminal defense attorney to represent her. Travis replied that she did not want an attorney and that she would represent herself.
On November 12, 1992, Binns sent a letter to AUSA Ernst that stated as follows:
Please be advised that for the limited purpose of responding to outstanding subpoenas I am representing . . . [the Trust], Ralph Anderskow, John Voigt and Jack Dunn. App. at 56.
When Binns filed a notice of appearance in July of 1993 indicating that he was joining Voigt's defense team, which already consisted of two (2) privately retained attorneys, the government submitted a letter to the district court suggesting a potential conflict arising out of Binns' prior representation of the Trust and Anderskow during the investigative phase of the case and requesting a hearing.
The government also indicated that there was a possibility that Binns would be called to testify at trial since a potential victim of the Trust had been instructed to deposit his advance fee into Binns' escrow account.
Shortly thereafter, codefendant Mercedes Travis filed a formal motion to disqualify Binns. She submitted an affidavit describing her professional interaction with Binns and his actions
in representing the Trust and its members in response to government subpoenas.
She argued that when Binns formerly represented the Trust he "was loosely representing all members of the Trust," and that she had consulted with him numerous times when he was acting
in that capacity, such that she was in effect a former client of his.
Travis also alleged that Binns might be in possession of certain documents or recordings material to her defense.
According to her affidavit, four boxes of her Trust documents and personal material had been shipped to Binns, but only two (2) of those boxes were produced to the government.
The remaining boxes and their contents have not been seen since they were shipped from Geneva.
Travis maintained that they are in Binns' possession and control.
The only missing item that Travis mentioned specifically is a tape of a 2-1/2 hour telephone conversation between Voigt, Dunn, and herself that ‘she had surreptitiously recorded in March
Travis stated that she phoned and faxed Binns repeatedly in an effort to recover her papers and this tape in particular, but Binns did not respond.
Travis asserted this as a separate ground for Binns' disqualification, arguing that:
it is possible in the defense of this matter
that I may need to have access to this tape or
documents or to account for their absence.
Mr. Binns may well have duties to his current
client not to provide access to this tape or
these documents. Mr. Binns could conceivably
be the only witness available to me should it
be necessary for me to account for the absence
of the tape or the documents. Id. at 71.
In response to the government's letter and Travis' disqualification motion, Binns submitted a letter to the district court attempting to dispel any notion that his representation of Voigt at trial would raise a conflict problem.
First, Binns asserted that he never had an attorney-client relationship with Travis. Binns claimed, therefore, that he could not have acquired any confidential information in the course of his association with Travis that would prejudice her defense.
Binns also disavowed any knowledge of the potential use of his escrow account in connection
with a victim of the Trust.
Binns asserted that "[t]here is no possibility that anyone acting in good faith would call me as a fact witness at the trial of this case." App. at 87.
Finally, Binns asserted that his alleged "representation" of co-defendant Anderskow had been limited to facilitating the Trust's response to the government's subpoenas.
Binns also claimed that after Anderskow's meeting with the FBI, in which Anderskow had indicated that Binns was representing the Trust and its members, he made clear to Anderskow that he was representing only Voigt.
With respect to the documents, Binns offered the following account of the way in which they came into his possession and the manner in which he disposed of them:
In October, 1992 I received four (4)
boxes of documents from Jack Dunn. He sent
them from Geneva, Switzerland. Messrs.
Voigt and Dunn told me that they couldn't get
Mercedes Travis to either come to the United
States or send documents responsive to Agent
Powell's 2nd Grand Jury subpoena.
They told me that she refused their repeated
requests to send the documents unless she
was paid a considerable sum of money.
When I received the boxes I did not open
them or look at the contents. I asked Mr.
Voigt to come to my office to pick up the
boxes. He said he wanted to produce
everything. . . . Mr. Voigt produced all of
the documents to the Grand Jury.
According to him, Ms. Travis withheld a
number of documents which she had in her
possession. Id. at 86.
Before hearing oral argument on Travis' motion, the district court stated:
I must say that the record before me raises
great concern in my mind. We have here
additional counsel. My concern is if we allow
this additional counsel to participate, we may
wind  up polluting an otherwise hopefully
error-free trial and creating issues of
conflict of interest, as well as the
possibility that this person who seeks to act
as an attorney is, in fact, a potential
witness. Id. at 190-91.
Binns then addressed the district court, essentially reiterating his reasons as to why the motion to disqualify should be denied, and offered to take the stand to repeat them under oath.
Attorneys for co-defendants Anderskow and Anchors indicated their clients' willingness to waive any issue of conflict arising out of Binns' representation of Voigt.
Both the government and Travis reiterated why Binns should be disqualified.
The district court did not hold an evidentiary hearing.
Instead, relying on the affidavits and Binns' oral representations, the court decided to grant the disqualification motion:
We have here a number of very serious
issues. As a matter of fact, I would
characterize it really as a foaming caldron of
representation issues here. Such that I am
convinced that it would be foolhardy for me to
go forward and inject potential error and
possible violation of the rights of co-defendants
in what purports to be a lengthy
and complicated criminal case right at its
inception before we have even heard any
…Mr. Binns has had substantial
involvement in pre-indictment events
concerning the case. I don't need to pass on
his credibility versus Ms. Travis's
credibility or to the extent that Mr.
Anderskow did or did not authorize his
representation. We have a letter that he
represented him for a limited purpose. We
have Mr. Anderskow, according to counsel's
submission, saying that he thought Mr. Binns
was going to represent him and later saying
that he didn't. While Mr. Anderskow certainly
can waive any conflict, the waiver would have
to be knowing and voluntary, and we'll get
into that a bit later.
And certainly Ms. Travis doesn't waive any issue here…
And I am convinced, based upon the
precedent, that it would be very foolish for
me to proceed and to allow [Binns to represent
Voigt]. . . . [T]o allow him to come into
court and cross-examine other persons based
upon his personal knowledge, possibly to
examine persons as to whom he has represented
beforehand, whether directly or otherwise, is
exactly the concern that the cases have
raised. Id. at 216-18.
The district court went on to note that it did not
think that Anderskow's or Anchor's waiver could be considered
knowing and voluntary at the beginning of a large multi-defendant,
multi-count trial. Binns ultimately was never called to testify at
trial, although there were sporadic references to him during
The Sixth Amendment provides that "[i]n all criminal
prosecutions, the accused shall enjoy the right . . . to have the
Assistance of Counsel for his defence." U.S. Const. amend VI. One
element of this basic guarantee is the right to counsel of choice.
Powell v. Alabama, 287 U.S. 45, 53, 53 S. Ct. 55, 58 (1932). The
right to counsel of choice, however, is not absolute. Wheat v.
United States, 486 U.S. 153, 108 S. Ct. 1692 (1988).
Thus, where "considerations of judicial administration" supervene, the presumption in favor of counsel of choice is rebutted and the right must give way. Fuller v. Diesslin, 868 F.2d 604, 607 & n.3 (3d Cir.), cert. denied, 493 U.S. 873, 110 S. Ct. 203 (1989).
Our decision in Fuller reveals that counsel of choice cases can further be divided into two (2) categories.
The first and most common type of case involves "arbitrary" denials of the right
to counsel. Fuller, 868 F.2d at 604; United States v. Flanagan,
679 F.2d 1072, 1075 (3d Cir. 1982) (Sixth Amendment "goes no
further than preventing arbitrary dismissal of the chosen
attorney."), vacated on other grounds, 465 U.S. 259, 104 S. Ct.
1051 (1984). A disqualification of counsel of choice is arbitrary
not because it is substantively "erroneous," but because it was the
product of a failure to balance proper considerations of judicial
administration against the right to counsel. See Fuller, 868 F.2d
at 604 (flat refusal to admit out-of-state attorneys pro hac vice);
United States v. Romano, 849 F.2d 812 (3d Cir. 1988) (summarily
denying request for chosen counsel); United States v. Rankin, 779
F.2d 956 (3d Cir. 1986) (summarily denying request for continuance
that would permit defendant to retain chosen counsel); United
States v. Laura, 607 F.2d 52 (3d Cir. 1979) (failure to make
findings essential to balancing required by Sixth Amendment).
Under current circuit precedent, arbitrary denials of the right to
counsel of choice mandate per se reversal. Fuller, 868 F.2d at
607-08 (citing Romano, 849 F.2d at 818, 820).
The second type of right to counsel of choice case concerns
"a nonarbitrary, but erroneous denial." Id. at 609 n.4.
In these cases, as Fuller's dictum describes, "a trial court could
make a reasoned determination on the basis of a fully prepared
record (hence a nonarbitrary determination), but still err in
concluding that counsel of choice should be denied." Id.
Thus, although a trial court's disqualification decision may be
substantively erroneous, it is non-arbitrary because the trial court
engaged in the balancing required by the Sixth Amendment and
developed the record necessary to do so. Id.
This is an important distinction for two (2) reasons.
First, and most importantly, Fuller suggested,
albeit in dictum, that non-arbitrary yet erroneous
denials of the right to counsel of choice might be subject to
harmless error analysis, and noted that no Third Circuit case has
decided that issue definitively. Id.
Second, the standard of review may be different, for the question whether a
disqualification is "arbitrary" is quite different from the
question whether the disqualification was substantively unjustified
under Wheat and its progeny.
Voigt claims that the district court failed to conduct the sort of inquiry required by our cases and, thus, that it arbitrarily violated his right to counsel of choice. In the alternative, Voigt contends that even if non-arbitrary, the district court's disqualification decision constituted an abuse of discretion.
Although two (2) potential grounds for disqualification were raised in the district court (Binns' prior representation and his status as a potential witness), it appears that the court relied on only the former.
The district court's oral disqualification decision,
which spanned four (4) pages of transcript, indicates that the
principal, if not the sole, basis for its decision was Binns' prior
status as an attorney for the Trust, Anchors, Anderskow and,
perhaps, Travis during the grand jury investigation. See, e.g.,
App. at 218 ("[T]o allow him . . . possibly to examine persons as
to whom he represented beforehand . . . is exactly the concern that
the cases have raised.").
The court viewed this as raising the potential for serious conflicts. Clearly, the potential for
serious conflicts is a consideration of judicial administration
that can outweigh a defendant's right to counsel of choice. Wheat,
486 U.S. at 163, 108 S. Ct. at 1699; United States v. Moscony, 927
F.2d 742, 750 (3d Cir.), cert. denied, 510 U.S. 1211, 111 S. Ct.
2812 (1991); Davis v. Stamler, 650 F.2d 477, 480 (3d Cir. 1981).
There is no question that the trial court performed the balancing required by our cases and considered a factor legitimately weighing against the right to counsel of choice.
Voigt contends that the district court's refusal to hold a separate evidentiary hearing renders the district court's disqualification of Binns per se arbitrary.
He relies on two (2) authorities in support of his claim: Fuller, 868 F.2d at 604, and,
to a lesser extent, United States v. Romano, 849 F.2d 812 (3d Cir. 1988).
In Fuller, a defendant who was represented by in-state
counsel filed a motion for admission of two (2) out-of-state lawyers
pro hac vice to represent him. The state trial court denied the
motion without holding a hearing or making particularized findings
of fact, on the grounds that the local counsel was competent to try
the case and that the admission of the two (2) out-of-state attorneys
would likely result in delays and administrative hassles. 868 F.2d
On appeal from the grant of Fuller's petition for a writ of habeas corpus, this court held that:
"the trial court's wooden approach and
its failure to make record-supported
findings balancing the right to counsel
with the demands of the administration
of justice resulted in an arbitrary denial
of Fuller's motion for counsel pro hac vice." Id. at 611.
Contrary to Voigt's assertion, our decision in Fuller does not stand
for the proposition that a trial court's denial of
a defendant's chosen counsel must be based on a hearing and
supported by factual findings in order to pass constitutional
While we held in Fuller that a trial court may not deny a
defendant's right to counsel of choice on the basis of
generalizations alone, we took pains to clarify that "we d[id] not
hold that a court is prohibited from using its 'instinct and
judgment based on experience' when it weighs the competing rights
of the litigant to counsel of his choice and wise judicial
administration." Id. (citation omitted).
As long as the court makes a "reasoned determination on the basis of a fully prepared
record," its decision will not be deemed arbitrary. 868 F.2d at 609 n.4.
Voigt also cites United States v. Romano, 849 F.2d at
812, in support of his argument that the district court's failure
to hold a hearing and make factual findings was reversible error.
In Romano, a pro se defendant sought to reserve the right to select
counsel of her choice in the event that the court found it
necessary to have stand-by counsel take over. The district court
summarily denied her request, instead appointing stand-by counsel
to back up defendant and potentially take over her defense.
This court ruled, as it did in Fuller, that the failure to conduct a
hearing and make findings of fact as to the suitability of
defendant's chosen counsel violated the defendant's Sixth
Amendment rights and constituted reversible error.
Taken together, Fuller and Romano do no more than
illustrate the well-established principle that a trial court may
not arbitrarily deny a defendant's right to counsel of choice.
While in both of those cases the court's failure to hold a hearing
or make factual findings was fatal, neither case establishes formal
procedures that a court must follow in weighing a defendant's Sixth
Amendment right to counsel of choice against the interests of the
proper and fair administration of justice. Rather, we found
hearings and/or factual findings necessary in those cases because
the district courts' determinations had no basis in fact or reason;
the trial court in Fuller denied the defendant's request for
admission of counsel pro hac vice on the basis of generalizations
and speculation, while the district court in Romano denied the
defendant's request for no apparent reason at all. Without some
sort of fact finding or hearing, these determinations could only be
In determining whether to disqualify counsel on conflict
of interest grounds, the district court need not find an actual,
existing conflict of interest. As the Supreme Court stated in
Wheat, the court:
must recognize a presumption in favor of
petitioner's counsel of choice, but that
presumption may be overcome not only by a
demonstration of actual conflict but by a
showing of serious potential for conflict.
The evaluation of the facts and circumstances
of each case under this standard must be left
primarily to the informed judgment of the
486 U.S at 164, 108 S. Ct. at 1700. Determining whether such a
potential conflict exists is no simple task. "The likelihood and
dimensions of nascent conflicts of interest are notoriously hard to
predict, even for those thoroughly familiar with criminal trials."
Id. at 162-63, 108 S. Ct. at 1699.
In this case, the district court heard oral argument, but
did not hold an evidentiary hearing. At the time of the argument,
however, the court had before it the submissions of the various
parties, including sworn affidavits and documentary evidence
attached as exhibits. This record was fairly substantial--
certainly far more so than anything that was before the courts in
Fuller and Romano.
The government's 11-page letter of August 6, 1993, attached exhibits including:
(1) Correspondence between Binns and the U.S. Attorney's Office regarding whom he represents;
(2) A memorandum and notes by Mercedes Travis regarding litigation strategies and mentioning Binns; and,
(3) Communications with investors in the Trust directing them to contact Binns or deposit funds into his escrow account.
Travis' motion included a sworn affidavit setting forth her relationship with Binns.
Binns' letter to the court laid out his version of events in great detail and attached 96-pages of documentary support, including but not limited to affidavits, grand jury transcripts, correspondence to and from Binns, and FBI reports.
Indeed, Binns' letter and supporting documentation were so thorough that he told the court at the hearing, "in substance, you have the story. The story is contained in my letter . . . ." App. at 204.
Under these circumstances, we conclude that the record was more than sufficient to enable the district court to make a reasoned and well-informed decision. Formal findings of fact are not required.
We agree with Voigt, however, that Binns' status as a potential witness, standing alone, cannot render the district court's disqualification order non-arbitrary.
Although Binns' status as a potential witness is certainly a proper consideration
of judicial administration, Stamler, 650 F.2d 480-81, the record
indicates that the decision to disqualify Binns was based primarily
on his alleged prior representation of the Trust and its members.
To be sure, the district court made passing reference to the
possibility of Binns' becoming a witness at trial. See App. at
Yet none of the reasons referred to by the district court
in its final oral decision indicated that Binns' status as a
potential witness was one of the "considerations of judicial
administration" that weighed into its balancing.
Moreover, the record is devoid of any "findings" as to Binns' status as a
potential witness that would have allowed the district court
properly to weigh that consideration against Voigt's presumed right
to counsel of choice (and allowed us to exercise appellate review).
The government's retort that "Voigt conspicuously fails
to argue that the district court could not have made the necessary
findings . . . .," Government's Br. at 34, is unsatisfactory in
First, it all but concedes that the district court failed to make any findings with respect to Binns' status as a potential witness.
Second, the government appears to make this argument in suggesting that the district court's disqualification was non-arbitrary.
But to be non-arbitrary, as we have noted, the district court actually must make findings based on evidence in the record and weigh those findings against the right to counsel. Permitting the government to argue that there was evidence in the record upon which the district court could have based findings that it concededly failed to make would simply inject a harmless error
inquiry into the one area that our right to counsel of choice jurisprudence indicates is singularly inappropriate.
Therefore, since the district court failed to address adequately the likelihood that Binns would be called as a witness, record evidence concerning that potential is irrelevant to the "arbitrariness"
In any event, we have determined that the court had sufficient other evidence before it to suggest that disqualification was appropriate.
It specifically referred to that evidence in announcing its decision to disqualify Binns. That is all our decisions prohibiting arbitrary denials of the right to counsel of choice require. See, e.g., Fuller, 868 F.2d at 604; Romano, 849 F.2d at 812.
We therefore reject Voigt's claim that the district court arbitrarily denied his Sixth Amendment right to counsel of choice.
In the alternative, Voigt contends that the disqualification decision amounted to an abuse of discretion because it was unwarranted given the information before the district court. We disagree.
In Wheat, 486 U.S. at 153, 108 S. Ct. at 1692, the Supreme Court considered the circumstances under which a trial court, consistent with the Sixth Amendment, could disqualify a defendant's chosen attorney. Wheat involved an attorney's potential representation of several codefendants in the same trial. Referring to the balancing required of trial courts in determining whether a potential conflict warranted disqualification, the Court wrote:
[A] district court must pass on the issue
whether or not to allow a waiver of a conflict
of interest by a criminal defendant not with
the wisdom of hindsight after the trial has
taken place, but in the murkier pre-trial
context when relationships between parties are
seen through a glass, darkly. The likelihood
and dimensions of nascent conflicts of
interest are notoriously hard to predict, even
for those thoroughly familiar with criminal
trials. . . . For these reasons we think the
district court must be allowed substantial
latitude in refusing waivers of conflicts of
interest . . . in the more common cases where
a potential for conflict exists which may or
may not burgeon into an actual conflict as the
trial progresses. . . .
. . . .
. . . The District Court must recognize a
presumption in favor of [a defendant's]
counsel of choice, but that presumption may be
overcome not only by a demonstration of actual
conflict but by a showing of a serious
potential for conflict.
Id. at 162-64, 108 S. Ct. at 1699-1700. The court also noted that,
even apart from the requirements of the Sixth Amendment, the
district court's independent duty "to investigate potential
conflicts arises in part from the legitimate wish of district
courts that their judgments remain intact on appeal." Id. at 161,
108 S. Ct. at 1698. Finally, the Court noted with approval that in
the case before it "the District Court relied on instinct and
judgment based on experience in making its decision." Id. at 163,
108 S. Ct. at 1699.
We begin by observing that the unique factual scenario presented by Binns' proposed representation of Voigt is quite different from the one presented in Wheat. This is not a case where the district court's sole or even primary interest was in protecting Voigt's right to the effective assistance of counsel by disqualifying an attorney whose potential conflicts of interest might impede his ability to defend his client. See, e.g., United States v. Lussier, 71 F.3d 456 (2d Cir. 1995) (reviewing propriety of trial court's decision to accept defendant's waiver of conflict- free representation), cert. denied, 116 S. Ct. 1321 (1996); United States v. Ross, 33 F.3d 1507 (11th Cir. 1994) (reviewing propriety of disqualification ordered to safeguard defendant's right to
conflict-free representation), cert. denied, 115 S. Ct. 2558 (1995).
On the contrary, as the record makes clear, what concerned the district court was the possibility that Binns' prior representation of the Trust and its members during the grand jury investigation might affect Anderskow's, Anchor's and Travis' ability to receive a fair trial. Nevertheless, because the effect of a disqualification is to deny a criminal defendant his or her presumptive right to chosen counsel, the question under Wheat is the same, even where the trial court's disqualification of chosen counsel is aimed at protecting the rights of persons other than the
Thus, we must determine whether the district court's
conclusion that there was an actual or serious potential for
conflict of interest constituted an abuse of discretion. Cf.Moscony, 927
F.2d at 750-51 (reviewing disqualification of defendant's attorney aimed, in part, at protecting rights of several government witnesses attorney represented at grand jury);
United States ex rel. Stewart v. Kelly, 870 F.2d 854 (2d Cir. 1989)
(reviewing disqualification of attorney aimed, in part, at
protecting rights of witness attorney had represented in the
We find no abuse of discretion in the district court's
disqualification of Binns. It was undisputed that Binns
represented the Trust and Anderskow for purposes of responding to
the grand jury subpoenas. There was also a very real possibility
that Anderskow might testify at trial, thereby subjecting himself
to cross-examination by Binns. We noted in Moscony that
"[c]onflicts of interest arise whenever an attorney's loyalties are
divided, and an attorney who cross-examines former clients
inherently encounters divided loyalties." 927 F.2d at 750
(citation omitted). Since there was a strong possibility that
Anderskow might face cross-examination by a former attorney, there
was a serious potential for a conflict of interest which,
notwithstanding Voigt's attempt to downplay it on appeal, warranted
disqualification. Wheat, 486 U.S. at 153, 108 S. Ct. at 1692
(disqualification due to conflict proper despite defendant's
attempts on appeal to minimize its extent).
Voigt makes much of the district court's refusal to
accept Anchors' and Anderskow's proffered waiver of the attorney-
client privilege in the event that Binns would have to cross-
examine them at trial. Nevertheless, we find no abuse of
discretion in the district court's decision. As the Wheat Court
noted, at the beginning of a criminal trial, "[t]he likelihood and
dimensions of nascent conflicts of interest are notoriously hard to
predict . . . ." Id. at 162-63, 108 S. Ct. at 1699.
Here, the district court obviously feared that if during trial the nature of
Binns' relationship with Anderskow and Anchors turned out to be
more significant than first thought, Anchors' and Anderskow's
rights to a fair trial could be jeopardized, thereby generating
potential appellate issues.
We have recognized that the district court has "an institutional interest in
protecting the truth-seeking function of the proceedings over which it is presiding . .
. [and] an independent interest in protecting a fairly rendered
verdict from trial tactics that may be designed to generate issues
on appeal." Moscony, 927 F.2d at 749. Accord Stewart, 870 F.2d at
856-57 ("Wheat emphasized the trial judge's duty to preserve the
integrity of the justice system by assuring [all] defendants a fair
trial."). We find nothing improper in the district court's refusal
to accept Anchors' and Anderskow's proffered waiver.
Moreover, at least one codefendant vehemently refused to waive the attorney-client privilege. Travis was a member of the Trust during the grand jury investigation and had substantial interaction with Binns during that period. Apart from the fact that this only added to the district court's growing concern about the ability of Voigt's codefendants to receive a fair trial, Binns' prior interaction with Travis may have been sufficient, in and of itself, to warrant disqualification since Binns may have acquired confidential information about her.
In Stamler, for example, we held that a trial court had
properly disqualified counsel for a corporation from serving as the
criminal defense attorney to the corporation's former president
despite the counsel's insistence that he had received no
information about the president's criminal activities while acting
as counsel to the corporation. "[I]t was not unreasonable for the
[trial court] to find that [the lawyer] might have obtained
information related to the criminal proceeding." 650 F.2d at 480.
In United States v. Rogers, 9 F.3d 1025 (2d Cir. 1993), cert.
denied, 115 S. Ct. 95 (1994), the Court of Appeals for the Second
Circuit upheld the disqualification of a corporate attorney who
sought to represent a corporate officer after having previously
attended a deposition with one of the corporation's employees. The
deposition concerned the same matter giving rise to the
prosecution, and the employee was to testify against the officer
during the criminal trial. The Second Circuit rejected the
defendant's claim that the disqualification was improper because
the attorney-client relationship allegedly giving rise to the
conflict was between the corporation and the attorney: "in this
case, [the witness], as an employee at [the corporation] when he
was deposed, should be considered a privy of the company. As such
his joinder in the motion to disqualify [the attorney] was
sufficient to assert the adverse nature of his interest and the
confidences he may have disclosed . . . ." Id. at 1031.
Here, Travis was adamant that she had imparted confidential information to Binns, and she indicated that she would take the stand in her own defense at trial, thereby subjecting herself to potential cross-examination by Binns.
The district court once again had an independent duty to safeguard Travis' right to a fair trial and to protect a potential judgment against her from attack on appeal. See Moscony, 927 F.2d at 751; Stamler, 650 F.2d at 480; see also Rogers, 9 F.3d at 1025.
In sum, we conclude that the district court acted prudently given the unenviable situation with which it was presented.
James Binns had substantial involvement in the grand jury investigation and he had sent a letter to the government tacitly acknowledging his multiple representation of Voigt, Anderskow and the Trust.
In light of the district court's obvious interest in safeguarding the codefendants' rights to a fair trial by avoiding the possibility that they would be cross-examined by Binns, we hold that the presumption in favor of Voigt's constitutional right to counsel of choice had been adequately rebutted. Accordingly, we reject Voigt's claim that the disqualification of Binns violated his Sixth Amendment right to counsel of choice.
THE MONEY LAUNDERING CONVICTIONS
Voigt alleges that his convictions on two (2) counts of money
laundering in violation of 18 U.S.C. Section 1956(a)(1)(A)(i) are
legally insufficient because the government failed to prove beyond
a reasonable doubt that the financial transactions forming the
basis of the laundering convictions "in fact involve[d] the
proceeds of specified unlawful activity." Id.
We review sufficiency of the evidence claims under a deferential standard.
"It is not for us to weigh the evidence or to determine the
credibility of the witnesses. The verdict of a jury must be
sustained if there is substantial evidence, taking the view most
favorable to the Government, to support it." United States v.
Schoolcraft, 879 F.2d 64, 69 (3d Cir.) (internal citations and
quotation marks omitted), cert. denied, 493 U.S. 995, 110 S. Ct.
546 (1989). If "any rational trier of fact could have found the
essential elements of the crime beyond a reasonable doubt," Jackson
v. Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 2789 (1979), then
the verdict of the jury must be sustained.
In this case, Voigt was convicted of depositing the proceeds of a certain transaction known as the "Neville Price transaction" into an account in the First Fidelity Bank in violation of 18 U.S.C. Section 1956(a)(1)(A)(i).
The evidence adduced at trial demonstrated that on October 1, 1991, a $500,000 advance fee
from the "Neville Price" transaction was deposited into co-defendant Ralph Anderskow's escrow account, which at the time contained over $600,000 from other sources.
On October 4, 1991, two wire transfers were made from Anderskow's account to Voigt's First Fidelity account, one for $90,000 and the other for $32,000.
These deposits formed the basis of the two money-laundering convictions that Voigt now challenges.
Voigt contends that because only $500,000 out of the $1.1 million in Anderskow's account was "tainted," the government failed to prove beyond a reasonable doubt that the two (2) wire transfers, which totaled $122,000, "involve[d] the proceeds of specified unlawful activity." Id.
Voigt concedes that not all of the money involved in a financial transaction that is the subject of a money laundering charge must derive from the proceeds of money laundering activity.
Rather, he contends that because Congress required that the financial transaction "in fact involve" the "proceeds of specified unlawful activity," id. (emphasis added), the government must prove that at least one dollar (or, even, one penny) is traceable to the proceeds of unlawful activity - a mathematical impossibility in cases such as this where:
(1) The wire transfers came from an account in which tainted funds had been commingled with untainted funds, and
(2) The amount of the transfer was less than the amount of untainted funds in the account.
Both the government and Voigt characterize the issue as one involving "which side should bear the uncertainty when tracing becomes an impossibility." Government's Br. at 46.
While the trend in our sister circuits has been to reject
the sort of legal sufficiency challenge raised by Voigt as a matter
of statutory construction, see United States v. Cancelliere, 69
F.3d 1116, 1120 (11th Cir. 1995), we need not decide this issue,
because we conclude that Voigt's claim fails on the facts.
While the flow-chart that the government relied on to establish the source of the $122,000 deposit does not reveal the source of the other funds in Anderskow's account, Anderskow himself conceded on cross-examination that all but $26,000 of the funds deposited into his Continental Bank account between 1990 and 1993 were advance fees paid by borrowers of and investors in the Trust.
As there was uncontroverted evidence at trial that no borrower or investor ever received any funds from the Trust, and as the jury found that the Trust was the engine of a scheme to defraud, we conclude that a rational trier of fact could easily have concluded that virtually all of the funds in Anderskow's account at the time of the $122,000 transfer represented the fruits of specified illegal activity.
THE FORFEITURE ORDER
In connection with the four (4) money laundering counts charged in the superseding indictment, the government brought separate criminal forfeiture allegations under 18 U.S.C. Section 982 seeking forfeiture of certain vehicles and pieces of jewelry either as "involved in" or "traceable to" Voigt's money laundering activity, id. Section 982(a)(1), or as substitute assets under 21 U.S.C. Section 853(p)(5), the CCE [Continuing Criminal Enterprise] criminal forfeiture provision, which is incorporated in 18 U.S.C. Section 982(b)(1).
At a non-jury proceeding conducted prior to sentencing, the district court determined that Voigt's money laundering convictions rendered him liable to the government for $1,661,960 in criminal forfeiture. In satisfaction of that amount, the court ordered forfeiture of, inter alia, two (2) pieces of jewelry, finding "by a preponderance of the evidence" that they were "items personal property . . . traceable to the money involved in the [money-laundering] violations. App. at 1246.
The jewelry had been purchased with funds from an account in which money laundering proceeds had been co-mingled with other funds - numerous deposits and withdrawals having intervened between the deposit of the laundered funds and the purchase of the jewelry.
Voigt raises two (2) assignments of error.
First, he contends that the district court applied the wrong burden of persuasion. He maintains that our decision in United States v. Pelullo, 14 F.3d 881 (3d Cir. 1994), requires the government to prove its forfeiture allegations beyond a reasonable doubt.
Second, Voigt asserts that the government failed to prove that the jewelry it sought was "traceable to" the proceeds of his money laundering activity, since it had been purchased with co-mingled funds from an account subject to numerous intervening deposits and withdrawals after the original deposit of the laundered funds.
Both of these contentions raise issues of first impression in this circuit.
With respect to the burden-of-proof issue, we conclude, as did the district court, that the
preponderance standard applies.
We agree with Voigt, however, that the numerous intervening deposits and withdrawals into his account subsequent to the deposit of the tainted funds make it impossible to say that the two (2) items of jewelry are "traceable to" property "involved in" the money laundering offense.
Accordingly, we will vacate the forfeiture order that was incorporated into the judgment and remand for further proceedings.
The forfeiture provision upon which the court's order was based, 18 U.S.C. Section 982, provides that a district court sentencing a person convicted of, inter alia, money laundering in violation of 18 U.S.C. Section 1956, "shall order that the person forfeit to the United States any property, real or personal, involved in such offense, or any property traceable to such property." 18 U.S.C. Section 982(a)(1).
Voigt first contends that the government's burden of persuasion for criminal forfeiture under 18 U.S.C. Section 982(a)(1) is proof beyond a reasonable doubt.
We have not yet had occasion to address the burden-of-proof issue with respect to Section 982(a)(1), and to date only one other court of appeals has considered it, concluding that preponderance-of-the-evidence standard applies. United States v. Myers, 21 F.2d 826, 829 (8th Cir. 1994), cert. denied, 115 S. Ct. 742 (1995). We have, however, addressed this issue twice previously in the context of other criminal forfeiture provisions. Pelullo, 14 F.3d at 881 (RICO; reasonable doubt); United States v. Sandini, 816 F.2d 869 (3d Cir. 1987) (CCE; preponderance). A description of the Sandini, Pelullo and Myers decisions is in order.
In Sandini, 816 F.2d at 869, we addressed the appropriate burden of persuasion under 21 U.S.C. Section 853, the CCE [Continuing Criminal Enterprise] criminal forfeiture provision. The defendant there argued that Section 853(d)'s inclusion of a rebuttable presumption of forfeitability if the government could demonstrate two factors by a preponderance of the evidence was unconstitutional to the extent it failed to require proof beyond a reasonable doubt.
After discussing the history of and distinction between civil in rem and criminal in personam forfeiture, we concluded that criminal forfeiture under CCE constitutes punishment for a crime, and not a separate element of the offense, notwithstanding Fed. R. Crim. P. 7(c)(2) (requiring the
indictment to specify the extent or interest of the property subject to forfeiture) and Fed R. Crim. P. 31(e) (requiring the jury to return a special verdict on same). Sandini, 816 F.2d at 875 &
n.7 ("assumption" in Rule 31(e) that forfeiture is element of the offense to be tried and proved is akin to nonbinding legislative history). Because other federal statutes providing for enhanced penalties have established the government's burden of proof as a preponderance of the evidence, we concluded that Section 853(d) withstands constitutional scrutiny as long as the forfeiture proceeding follows a conviction by proof beyond a reasonable doubt.
7-years later we confronted the same question in the context of 18 U.S.C. Section 1963, the RICO statute's criminal forfeiture provision. Pelullo, 14 F.3d at 881.
We held that the beyond-a-reasonable-doubt standard governs such forfeitures.
Our conclusion was premised mainly on Congress' simultaneous amendments to the
RICO [Racketeering Influenced Corrupt Organization] and CCE [Continuing Criminal Enterprise] forfeiture statutes in 1984, and its decision not to add a rebuttable presumption provision to 1963(a) when it added such a provision to the CCE statute. See 21 U.S.C. Section 853(d)
(discussed in Sandini, 816 F.2d at 874-75).
We concluded that the omission was deliberate and, hence, dispositive:
"This indicates that Congress intended the higher beyond a reasonable doubt
standard to control in a Section 1963(a) proceeding. If Congress wanted
a preponderance standard for Section 1963(a), it would have so stated as
it specifically did for CCE." Pelullo, 14 F.3d at 905. See id. at
903 ("Most important, the CCE rebuttable presumption . . . does not exist in
the RICO forfeiture provisions.") (citations omitted).
We distinguished our decision in Sandini on the basis that it
pertained only to CCE and could not bind a future panel of this
court considering a different forfeiture provision. See id. ("Sandini does
not decide the issue in this case because the statute at issue there was CCE, not RICO.").
In Myers, 21 F.3d at 826, the Court of Appeals for the
Eighth Circuit concluded that the government's burden of proof
under 982(a)(1) was the preponderance standard. Noting that it
had decided in a different case handed down the same day that the
preponderance standard governed forfeitures under CCE, the court
[t]he language of the money laundering
forfeiture statute is very similar to the
language of section 853(a). By stating that
"the court, in imposing sentence on a person
convicted" of a money laundering offense,
shall forfeit property involved in the
offense, Congress indicates that forfeiture
under the money laundering provision is also a
sentencing sanction, not an offense or element
of an offense. Id. at 829 (alteration omitted).
While Sandini and Pelullo are useful guides, we begin by
observing that prior decisions of this court interpreting different
criminal forfeiture provisions do not constitute binding precedent
on the issue before us. Similarly, the reasoning underlying those
decisions is not binding, although to the extent that the statutes
are analogous it may be persuasive. We must begin the task afresh
and determine which burden of proof Congress intended to apply to
Perhaps the most striking feature of the forfeiture
provision is that it requires the district court to order
forfeiture "in imposing sentence on a person [already] convicted of
an offense in violation of . . . section 1957 . . . of this title
. . . . " 18 U.S.C. Section 982(a)(1) (emphasis added). As the Myerscourt
observed, the plain language of the statute reveals that
forfeiture is a form of sentence enhancement that follows a
previous finding of personal guilt. Myers, 21 F.3d at 829. As a
result, we conclude that the preponderance, not the reasonable
doubt, standard governs forfeiture under Section 982(a)(1).
Voigt's most forceful argument to the contrary is that when Congress enacted the money laundering forfeiture statute, it specifically incorporated in Section 982(b)(1), the statute's procedural component, virtually all of the subsections of 21 U.S.C. Section 853, the procedural provisions of the CCE forfeiture statute, yet it omitted Section 853(d), the rebuttable presumption provision we found dispositive in Sandini.
Relying on Pelullo, where we attached much significance to Congress' failure to add a provision like Section 853(d) to RICO's forfeiture provision, Voigt argues that Congress' decision not to include Section 853(d) as one of the subsections incorporated via Section 982(b)(1) evinces an intent to require application of the reasonable doubt standard.
We think Voigt's argument proves too much.
At most, Congress may have decided it did not want the rebuttable presumption to apply in money laundering cases. But that by no means compels us to conclude that the reasonable doubt standard should apply in such cases.
Furthermore, acknowledging that the burden of proof is simply a means of expressing our tolerance for erroneous outcomes, there are good reasons for employing the reasonable doubt standard in the RICO context but not in the money-laundering context.
The RICO forfeiture provision is by far the most far reaching,
requiring the district court to order forfeiture of "any interest
the person has acquired or maintained in violation of section
1962," 18 U.S.C. Section 1963(a)(1), as well as any "interest in,"
"security of," "claim against," or "property or contractual right
of any kind affording a source of influence over  any enterprise
which the person has established, operated, controlled, conducted,
or participated in the conduct of in violation of section 1962."
Id. Section 1963(a)(2).
The statute further requires forfeiture of "any property constituting, or derived from, any proceeds which the person obtained, directly or indirectly, from racketeering activity . . . in violation of section 1962." Id. Section 1963(a)(3).
Section 1963(a)'s coverage, to say the least, is extremely broad and sweeping. See Rusello v. United States, 464 U.S. 16, 26, 104 S. Ct. 296, 302 (1983) ("The legislative history clearly demonstrates that the RICO statute was intended to provide new weapons of
unprecedented scope for an assault upon organized crime and its
economic roots."); Craig W. Palm, RICO Forfeiture and the Eighth
Amendment: When is Everything Too Much?, 53 U. Pitt. L. Rev. 1, 27
(1991) ("The most striking aspect of RICO's forfeiture provisions
is their unprecedented nature and breadth. The language of the
forfeiture provisions is extremely broad and comprehensive . . .
."). Indeed, Section 1963(a) sweeps far more broadly than the elements
of the substantive RICO offense itself. See 18 U.S.C. 1962.
Accordingly, since the identity and extent of property subject to
forfeiture will not have been addressed in the course of proving
the substantive RICO charge, a reasonable doubt burden of
persuasion ensures greater accuracy in determining the scope of
property subject to forfeiture.
In the money laundering context, by contrast, the
forfeiture provision makes clear that the government is entitled
only to property "involved in" or "traceable to" money laundering
activity. See generally United States v. $448,342.85, 969 F.2d
474, 476 (7th Cir. 1992) (government entitled only to "funds" used
in offense, not whole account into which such funds had been
Furthermore, "property involved in a financial transaction" is part of an element of the money laundering offense, see 18 U.S.C. Section 1956(a)(1), and the term "transaction" is defined
in the statute. See id. Section 1956(c)(3).
Unlike the RICO context, we have no reason to doubt that the amount of the transaction that
forms the basis of a substantive money laundering offense will be identified in the indictment and, thus, that its connection to money laundering activity will have been proved beyond a reasonable doubt at trial.
As the government has observed, in many cases the only factual issues left for resolution after trial will be whether particular items bought with tainted funds are "traceable to" money laundering activity.
Applying a beyond-a-reasonable-doubt standard to that issue appears unnecessary.
Accordingly, we agree with the Eighth Circuit's decision in Myers that the government's burden for
forfeiture under 982(a)(1) is the preponderance standard.
Voigt next argues that the government failed to prove that the money used to purchase the jewelry in question was "traceable to" money laundering proceeds, as required by 18 U.S.C.
His argument is based on the fact that the jewelry was purchased with funds drawn from an account in which money-laundering proceeds had been commingled with other funds, and that those funds were further "diluted" by numerous intervening deposits and withdrawals.
Voigt asserts that if the jewelry was subject to forfeiture, it was under 21 U.S.C. Section 853(p)(5), the CCE substitute asset provision incorporated into the money laundering forfeiture scheme via 18 U.S.C. Section 982(b)(1).
The government counters by observing that criminal forfeiture is an in personam punishment,
which obviates the need for strict tracing, especially where tainted and untainted funds are commingled in a bank account, making tracing a virtual impossibility.
The government's observation concerning the in personam nature of criminal forfeiture is helpful to a certain extent:
The amount of forfeiture to which the government is entitled under 18 U.S.C. Section 982 is not dictated by whether the government can prove that certain of the defendant's property is in fact property "traceable to" money laundering activity.
When a defendant has been convicted of committing $1.6-million in money laundering offenses (as Voigt was here), the government has proved beyond a reasonable doubt that it is entitled to $1.6-million in criminal forfeiture; that amount represents property "involved in" money laundering activity for purposes of Section 982(a)(1).
What is at issue here is the question of how the government may go about seizing property in satisfaction of that $1.6-million amount.
The government's principal contention is that money is fungible, making it impossible to differentiate between "tainted" and "untainted" dollars in a bank account.
The government also advances what is clearly a policy argument, contending that interpreting the term "traceable to" to require even some tracing "would perversely permit money launderers to escape with all of their proceeds intact simply by commingling such tainted proceeds with untainted sums - a result Congress could not have intended." Government's Br. at 53.
To support its arguments, the Government has cited a
number of cases dealing with the tracing issue in the context of 18
U.S.C. Section 1963(a), the RICO statute's criminal forfeiture provision.
See generally United States v. Robilotto, 828 F.2d 940, 949 (2d
Cir. 1987), cert. denied, 484 U.S. 1011, 108 S. Ct. 711 (1988);
United States v. Ginsburg, 773 F.2d 798, 802-03 (7th Cir. 1985) (en
banc), cert. denied, 475 U.S. 1011, 106 S. Ct. 1186 (1986); United
States v. Conner, 752 F.2d 566, 576 (11th Cir.), cert. denied 474
U.S. 821, 106 S. Ct. 72 (1985).
These cases hold that where crime proceeds have been commingled in a bank account with untainted funds, tracing is not required. The reasoning supporting those holdings is:
(1) The in personam nature of criminal forfeiture; and,
(2) The courts' conclusion that when Congress used the term "traceable to," it could not have intended to require the government to demonstrate some nexus between the criminal activity and the property sought - at least not where cash has been deposited into a bank account.
Regardless of whether these cases were correct on their
merits, however, they were decided before the President signed into
law the Anti-Drug Abuse Act of 1988. Pub. L. No. 100-690, 102
Stat. 4374-75 (1988). With that act Congress added subsection (b)
to 982, which incorporates the CCE forfeiture statute's
"substitute asset" provision:
[i]f any of the property described in
subsection (a) of this section, as a result of
any act or omission of the defendant . . . has
been commingled with other property which
cannot be divided without difficulty; the
court shall order the forfeiture of any other
property of the defendant up to the value of
any property described in paragraph . . .
21 U.S.C. Section 853(p)(5). The inclusion of the substitute asset
provision in the money laundering forfeiture scheme represents
Congress' express recognition that property subject to criminal
forfeiture can be commingled with "untainted" property. It may
also be an acknowledgement by Congress that its earlier-enacted
criminal forfeiture provisions, such as RICO and CCE, were
unartfully drafted to the extent that they failed to address the
problem posed by commingled property.
In our view the specific inclusion in Section 982 of a
substitute asset provision precludes us from interpreting the term
"traceable to," as did the courts in the RICO context, to avoid a
perceived bad policy result. See United States v. Ripinsky, 20
F.3d 359, 365 n.8 (9th Cir. 1994) (" 982 . . . defines forfeitable
assets to be only those associated with the underlying offense or
traceable to the offense and distinguishes between 'forfeitable'
and 'substitute' assets."). Because Congress has made the
determination not to "perversely permit money launderers to escape
with all of their proceeds intact simply by commingling such
tainted proceeds with untainted sums . . . .," Government's Br. at
53, we should not be in the business of overlooking the plain terms
of a statute in order to implement what we, as federal judges,
believe might be better policy. Accordingly, the government's
policy arguments, along with the cases supporting them, are
Seeking to avoid our conclusion that cases decided prior
to the enactment of the money laundering forfeiture statute are not
controlling, the government observes that in 1986 Congress added a
substitute asset provision to RICO's forfeiture scheme. Relying on
In re Billman, 915 F.2d 916, 920 (4th Cir. 1990), cert. denied, 500
U.S. 952, 111 S. Ct. 2258 (1991), the government contends that the
addition of a substitute asset provision to the RICO statute could
not affirmatively undo the settled judicial determination that the
words "traceable to" in the RICO forfeiture statute do not require
tracing of commingled funds.
The government therefore suggests that in the money laundering forfeiture context it can seek forfeiture of items purchased with commingled funds either as "traceable to" or as substitute assets. We disagree.
As the Ninth Circuit's decision in Ripinsky makes clear,
the government's position is internally inconsistent. The
substitute asset provision comes into play only when forfeitable
property cannot be identified as directly "involved in" or
"traceable to" money laundering activity.
Clearly, if funds commingled in a bank account are sufficiently identifiable as to be considered "traceable to" money laundering activity, then the substitute asset provision should have no applicability whatsoever.
Accordingly, the government's contention that the "traceable to" and substitute asset theories merely create alternative paths to forfeiture, which the government may choose at its option, is illogical.
We also do not understand why an amendment to a statute cannot affirmatively reverse, or at least cast substantial doubt on, prior court decisions interpreting earlier versions of that
This is especially true where, in undertaking to discern the plain meaning, those decisions essentially held (for policy reasons) that Congress simply could not have meant what it said.
Indeed, if the legitimacy of the courts' interpretation of the RICO statute had been beyond doubt, then the addition of a substitute asset provision to the RICO, CCE and money laundering criminal forfeiture schemes would seem superfluous.
Furthermore, we think the government's interpretation of Billman proves too much.
In Billman the Fourth Circuit cited to the prior case law holding that the in personam nature of criminal forfeiture makes tracing under the RICO statute's forfeiture provision unnecessary. It then made the unremarkable observation, which the government apparently finds significant, that "[t]hese principles are embodied in an amendment to the act, which makes provision for the forfeiture of substitute assets." 915 F.2d at 920.
Contrary to the government's interpretation, however, that observation may signal the Fourth Circuit's view (which we expressed above) that Congress recognized its unartfulness in using the term "traceable to" in its forfeiture statutes. Moreover, the Fourth Circuit may have recognized that in amending forfeiture statutes to include a substitute asset provision, Congress may have appreciated that courts had been stretching to avoid the result of applying the plain meaning of the term "traceable to" to commingled property.
Even if Billman can be read to suggest that the addition
of a substitute asset provision to RICO's criminal forfeiture
scheme cannot undo prior judicial interpretations of the words
"traceable to" in the RICO context, we simply cannot ignore the
plain fact that the money laundering criminal forfeiture provision
contains a substitute asset provision that appears to be addressed
directly to the situation confronting us in this case.
We are unaware of any decision that has imported the restrictive definition of "traceable to" prevalent in the RICO context into the money laundering forfeiture scheme.
In sum, to accept the government's argument that "traceable to" does not mean what it says for purposes of commingled property, in effect would render the substitute asset provision a nullity, in contravention of a well-settled canon of statutory construction that "courts should disfavor interpretations of statutes that render language superfluous." Connecticut Nat'l Bank v. Germain, 503 U.S. 249, 253, 112 S. Ct. 1146, 1149 (1992).
We hold that the term "traceable to" means exactly what it says.
In light of our holding on the burden of proof, this means that the government must prove by a preponderance of the evidence that the property it seeks under Section 982(a)(1) in satisfaction of the amount of criminal forfeiture to which it is entitled has some nexus to the property "involved in" the money laundering offense.
For example, if the defendant receives $500,000 cash in a money-laundering transaction and hides the cash in his house, the government may seize that money as property "involved in" the money laundering offense.
If the defendant purchased a $250,000 item with that money, the government may seek the remaining cash as "involved in" the offense, whereas the item purchased is subject to forfeiture as property "traceable to" property involved in the money laundering offense.
Where the property involved in a money laundering
transaction is commingled in an account with untainted property,
however, the government's burden of showing that money in the
account or an item purchased with cash withdrawn therefrom is
"traceable to" money laundering activity will be difficult, if not
impossible, to satisfy.
While we can envision a situation where $500,000 is added to an account containing only $500, such that one might argue that the probability of seizing "tainted" funds is far greater than the government's preponderance burden (50.1%), such an approach is ultimately unworkable.
As the Seventh Circuit, speaking through Judge Easterbrook, has observed, a bank account is
simply a number on a piece of paper:
Bank accounts do not commit crimes; people do.
It makes no sense to confiscate whatever
balance happens to be in an account bearing a
particular number, just because proceeds of
crime once passed through that account. . . .
An "account" is a name, a routing device like
the address of a building; the money is the
"property" [for purposes of the forfeiture
Once we distinguish the money from
its container, it also follows that the
presence of one illegal dollar in an account
does not taint the rest - as if the dollar
obtained from [money laundering activity] were
like a drop of ink falling into a glass of water.
$448,342.85, 969 F.2d 474, 476 (7th Cir. 1992).
The solution, we think, is to give effect to the
substitute asset provision. See 18 U.S.C. Section 982(b)(1)
(incorporating 21 U.S.C. Section 853(p)(5)).
Thus, once a defendant has commingled laundered funds
with untainted funds--whether in a bank
account or in a tattered suitcase - such that they "cannot be
divided without difficulty," 21 U.S.C. Section 853(p)(5), the government
must satisfy its forfeiture judgment through the substitute asset
Once property subject to forfeiture under Section 982(a)(1)
is no longer identifiable due to some act of the defendant, the
government may seek any property, cash or merchandise, in
satisfaction of the amount of criminal forfeiture to which it is
In light of our analysis, the district court's forfeiture order, which is incorporated into Voigt's judgment of conviction and sentence, cannot stand.
Even under the preponderance standard, the items of jewelry cannot be considered "traceable to" the proceeds of money laundering activity; the jewelry was purchased with funds from an account into which money laundering proceeds had been commingled with other funds, and after numerous intervening deposits and withdrawals.
We therefore cannot say that, more probably than not, the jewelry is "traceable to" money laundering activity.
Notwithstanding our conclusion, the government continues to be entitled to $1.6-million in criminal forfeiture. But to the extent that the forfeiture order incorporated in the judgment required Voigt to hand jewelry over to the government under an erroneous legal determination, the government is improperly in possession of that jewelry.
We do not envision that the district court will have to conduct a de novo forfeiture proceeding on
Since all that is at issue is the process by which the government may seize property in satisfaction of the $1.6-million to which it is lawfully entitled, on remand the government should be permitted to move to amend the judgment to reflect that the jewelry is forfeitable as a substitute asset. Cf. United States v. Hurley, 63 F.3d 1, 23 (1st Cir. 1995) (no error where, after notice of appeal from conviction was filed, government moved for and received from district court permission to seize certain property as "substitute assets"); Todd Barnet & Ivan Fox, Trampling on the Sixth Amendment: The Continued Threat of Attorney Fee Forfeiture, 22 Ohio N.U. L. Rev. 1, 55 (1995) ("The substitute assets provisions constitute a procedural alternative for collecting a forfeiture judgment and are not a form of punishment in their own right . . . .").
THE TAX EVASION CONVICTIONS
Voigt contends that his convictions on two (2) counts of tax evasion under 26 U.S.C. Section 7201 (relating to the 1990 and 1991 tax years) are legally insufficient because the government failed to adduce evidence of an "affirmative act" of tax evasion, which is an essential element of the offense.
Prior to trial, Voigt moved for and received a bill of
particulars relating to the tax evasion counts because the
indictment failed to specify the affirmative acts on which the
government intended to rely at trial.
The bill of particulars indicated four (4) separate acts of evasion:
(1) Voigt's submission of a partially false and partially incomplete Internal Revenue Service ("IRS") Form 433-A understating the amount in his First Fidelity Bank account, his failure to fulfill his promise to provide the missing information to an IRS agent, and his failure to tell the agent of his advance-fee income earned in 1989 and 1990;
(2) Voigt's decision not to purchase a piece of jewelry with cash when informed that a Currency Transaction Report would have to be filed with the IRS;
(3) Voigt's role in requiring potential victims of the Trust to fill out bizarre confidentiality agreements that forbade them from disclosing details of their transaction; and
(4) Voigt's maintenance of overseas bank accounts and his direction to Anderskow to wire funds into those accounts.
At trial the government introduced evidence on all four affirmative acts.
Essential to a conviction under 26 U.S.C. Section 7201 is:
"1) The existence of a tax deficiency,
2) An affirmative act constituting an attempt to evade or defeat payment of the tax, and
3) Willfulness." United States v. McGill, 964 F.2d 222, 229 (3d
Cir.), cert. denied, 506 U.S. 1023, 113 S. Ct. 664 (1992).
Voigt claims that the government's proof at trial failed to establish the second (2nd) element as a matter of law because none of the alleged affirmative acts shows that his purpose was to evade the payment of taxes.
Bearing in mind that "[o]ur review of the sufficiency of the evidence is 'governed by strict principles of deference to a jury's findings,'" id. (quoting United States v. Ashfield, 735 F.2d
101, 106 (3d Cir.), cert. denied, 469 U.S. 858, 105 S. Ct. 189 (1984), we reject Voigt's legal sufficiency challenge.
With respect to the first affirmative act charged by the
government, the submission in September of 1990 of a materially
misleading Form 433-A, Voigt claims that "[t]hese false statements
could not . . . have been used to evade taxes for 1990 and 1991,
taxes which were not even due until April 15, 1991 and April 15,
1992, respectively." Voigt's Br. at 36. The IRS uses Form 433-A
to identify potential assets with which a taxpayer who owes back
taxes can pay them and to establish a method of collection. Since
the form at issue dealt with payment of taxes owed in (or prior to)
1990, and since it was submitted before the deficiencies that are
the focus of the tax evasion charges arose, Voigt contends that it
cannot have been calculated "to mislead the government or conceal
funds to avoid payment of an admitted and accurate deficiency" as
a matter of law. McGill, 964 F.2d at 230 (emphasis added).
In McGill we addressed the question whether an
affirmative act can predate the existence of a tax deficiency and
cited to conflicting authority on that issue.
We declined to answer that question definitively, however, because the crime charged in the indictment pointed to the date the deficiency arose as the date of the offense:
"The indictment by its terms required
the jury to look forward in time for evidence of affirmative acts."
Id. at 231. Once again, we decline the parties' invitation to rule
as a general matter on whether pre-deficiency conduct can satisfy
the statute's "affirmative act" element.
For here, as in McGill, the superseding indictment charged Voigt with violating 26 U.S.C.
Section 7201 "[o]n or about April 15, 1991" and "[o]n or about April 15,
1992." App. at 432, 433.
Accordingly, even if conduct predating the existence of a deficiency can constitute proof of an
affirmative act of tax evasion, the government's failure to include
the pre-deficiency period in the indictment's specification of the
offense charged precludes it from relying on conduct predating the
existence of the deficiency as substantive evidence of affirmative
acts of evasion. McGill, 964 F.2d at 231 ("The Government must
prove attempted evasion for each count beginning at the dates
[charged in the indictment].").
This same reasoning applies to the government's
contentions that Voigt's failure to fulfill his promise to provide
the IRS agent with income information missing from his Form 433-A
and his failure to disclose to the IRS agent advance-fee income
earned in 1989 and 1990 constitute affirmative evasive acts.
These actions, like the submission of the false Form 433-A in the first
place, were taken in the context of a collection action for
delinquent taxes from prior years, and preceded the tax liabilities
on which the evasion charges are based. As with the submission of
the false Form 433-A, we believe that the circumstances do not
warrant a finding that these prior acts were affirmative evasive
acts that laid the groundwork for later tax evasion.
Nevertheless, the three (3) additional affirmative acts proved by the government at trial, when taken together, are sufficient to sustain the jury's verdict.
The Supreme Court has said of the affirmative act element that "[i]f the tax evasion
motive plays any part in such conduct[,] the offense may be made
out even though the conduct may also serve other purposes such as
concealment of other crime." Spies v. United States, 317 U.S. 492,
499, 63 S. Ct. 364, 368 (1943). Elaborating on the "affirmative
act" requirement, we stated in McGill that an "affirmative act is
anything done to mislead the government or conceal funds to avoid
payment of an admitted and accurate deficiency." McGill, 964 F.2d
at 230. We also noted that "[o]ne act will suffice." Id. at 229
(citing United States v. Conley, 826 F.2d 551, 556-57 (7th Cir.
1987)). Whereas simple nonpayment of taxes owed cannot sustain a
conviction under the statute, acts intended to conceal or mislead
Voigt argues that the government's proofs as to the second, third and fourth affirmative acts were legally insufficient because they were equally consistent with innocent activity and, more specifically, because there was no evidence linking them to a "motive" or "intent" to evade. According to Voigt, therefore, there must be direct evidence of intent before a rational trier of fact can conclude beyond a reasonable doubt that an affirmative act was undertaken, in part, to evade the payment of income tax.
Voigt's legal proposition is without precedential support.
In the majority of criminal cases, the element of intent
is inferred from circumstantial evidence. See generally United
States v. Iafelice, 978 F.2d 92, 98 (3d Cir. 1992) ("It is not
unusual that the government will not have direct evidence. [Mens
rea] is often proven by circumstances."). The rule is no different
in tax evasion prosecutions. The Supreme Court in Spies stated
that "any conduct, the likely effect of which would be to mislead
or conceal," is sufficient to satisfy the "affirmative act"
element. Spies, 317 U.S. at 499, 63 S. Ct. at 368 (emphasis
added). Accord United States v. Mal, 942 F.2d 682, 687 (9th Cir.
1991) (evasion of payment "involves conduct designed to place
assets beyond the government's reach after a tax liability has been
assessed") (emphasis added); Conley, 826 F.2d at 556 (rational jury
can infer intent to evade upon learning of manner in which
defendant conducted his financial affairs); United States v.
Shorter, 809 F.2d 54, 57-58 (D.C. Cir.) (jury could infer intent to
evade where defendant carried on "cash lifestyle"), cert. denied,
484 U.S. 817, 108 S. Ct. 71 (1987); United States v. Voorhies, 658
F.2d 710, 714-15 (9th Cir. 1981) ("Voorhies' conduct in 1974 [of
liquidating assets and transporting proceeds to Switzerland] had
the 'likely effect' of misleading or concealing."). These cases
simply require that there be some evidence from which a jury could
infer an intent to mislead or conceal beyond mere failure to pay
assessed taxes; it is for the jury to determine, as a matter of
fact, whether the affirmative act was undertaken, in part, to
conceal funds from or mislead the government.
We have no difficulty concluding, therefore, that Voigt's
refusal to pay for a piece of jewelry in cash; his use of bizarre
confidentiality agreements; and his maintenance of overseas bank
accounts, taken together, provided the jury with sufficient
evidence from which it could infer that they were "designed" to
evade the payment of admitted tax deficiencies, even if such
actions otherwise might constitute wholly innocent conduct. See United
States v. Jungles, 903 F.2d 468, 473-74 (7th Cir. 1990)
(activity that is lawful itself can constitute affirmative act to
evade); see also United States v. Pollen, 978 F.2d 78, 86 (3d Cir.
1992) (transporting funds to foreign countries, thereby making it
more difficult to trace, provides inference of intent to evade),
cert. denied, 508 U.S. 906, 113 S. Ct. 2332 (1993).
The evidence at trial indicating a possible motive unrelated to tax obligations for some or all of the affirmative acts, upon which Voigt heavily relies on appeal, was before the jury. It chose to reject Voigt's proffered interpretation and accept the government's. Given our deferential standard of review, United States v. Casper, 956 F.2d 416, 421 (3d Cir. 1992), along with the settled rule that we draw all reasonable inferences in favor of the jury's verdict, Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct 2781, 2789 (1979), we may not substitute our (or Voigt's) judgment for that of the jury; Voigt's legal sufficiency challenge is essentially a futile attempt to rehash his closing argument.
Finally, even were we to agree that, standing alone, the three (3) remaining affirmative acts were insufficient to establish Voigt's intent to evade payment, our decision in McGill instructs that the jury was entitled to consider Voigt's submission of a materially misleading Form 433-A in 1990 as relevant evidence on the question whether his later actions were intended to be evasive. See supra n.25. This provided the jury with ample basis on which to convict, since in 1990 Voigt had materially misled the IRS in order to hamper its attempts to collect back taxes. The jury readily could have concluded that Voigt's later actions were not innocent as Voigt claimed but, rather, were part of a conscious and continued attempt to thwart the IRS's collection efforts.
Accordingly, we reject Voigt's legal sufficiency challenge to his tax evasion convictions.
THE RESTITUTION ORDER
At sentencing, the district court ordered Voigt to make $7,040,000 in restitution. Finding that Voigt had secreted substantial sums of money derived from the Trust's advance-fee scheme, the district court noted in its amended judgment that as was demonstrated at trial and at various motion hearings,  defendant has himself deposited or forwarded to others for deposit in various accounts in various European banks, millions of dollars in cash and other property.
To cite but two (2) examples, the Government has already obtained a release and assignment of funds and property currently frozen at UNITED OVERSEAS BANK in Switzerland in the account of defendant's former girlfriend; and the Government has received a similar release and assignment from defendant pertaining to funds frozen in his accounts at the same bank. App. at 1394.
Voigt now challenges the district court's restitution order and, more specifically, the lack of "specific findings" as to his ability to pay. Claiming that "there is no evidence of any funds elsewhere," Voigt's Br. at 48, Voigt asks us to vacate the restitution order and remand for recalculation.
We review the restitution award for abuse of discretion. United States v. Graham, 72 F.3d 352, 355 (3d Cir. 1995), cert. denied, 116 S. Ct. 1286 (1996).
In United States v. Logar, 975 F.2d 958 (3d Cir. 1992),
we held that when a district court imposes an order of restitution
under the Victim and Witness Protection Act ("VWPA"), codified at18 U.S.C.
3663-64, it is required "'to make specific findings as
to the factual issues that are relevant to the application of the
restitution provisions . . . .'" Id. at 961 (quoting United States
v. Palma, 760 F.2d 475, 480 (3d Cir. 1985)). One of the relevant
provisions to which the requirement of specific factual findings
applies is "the defendant's ability to pay and the financial need
of defendant and the defendant's dependents." United States v.
Copple, 24 F.3d 535, 549 (3d Cir.) ("Copple I") (citing Logar, 975
F.2d at 961), cert. denied, 115 S. Ct. 488 (1994)). The
restitution amount must reflect the defendant's ability to pay
within five years after the date of sentencing. 18 U.S.C. Section
In Copple I, the district court ordered restitution of
approximately four million dollars after simply adopting as its
factual findings the amount of loss to the victims calculated in
the presentence report, but without specific findings on either the
amount of loss or Copple's ability to pay. After the case had been
remanded to the district court and a resentencing hearing had been
held, the court reinstated its restitution order of four million
dollars. Although it had made specific findings concerning the
amount of the loss, which Copple did not challenge, the district
court found that despite the defendant's current financial
hardship, he had the potential to earn money in the future given
his past success as a businessman.
On appeal a different panel of this court again vacated
the restitution award and remanded for resentencing. United States
v. Copple, 74 F.3d 479 (3d Cir. 1996) ("Copple II"). We found that
a defendant's past success as a businessman, alone, could not
justify the four-million-dollar restitution award, since it was
unrealistic that the defendant would be able to earn that amount of
money over five years. The court made no "findings about Copple's
financial needs, and observed only that 'the family is in dire
financial straights at this time,' an assertion hardly supportive
of the exceptionally large restitution amount it ultimately
ordered." Id. at 483.
As to the government's contention that the restitution
award should be sustained because it implicitly reflected amounts
attributable to assets Copple acquired with misappropriated funds,
we agreed that
[t]he proceeds from a defendant's illegal
conduct that the defendant still retains or
can recoup are certainly encompassed within
the "financial resources of the defendant"
that the district court should consider in
fashioning a restitution order. Of course,
the continued existence of such proceeds is a
factual issue that should be accompanied by
Id. at 484 (citation omitted). We went on to note that, in
determining a restitution award based on "the court's reasonable
belief that there are secreted assets," id., the district court may
calculate the total proceeds of defendant's crime minus amounts
already accounted for, and then place the burden of accounting for
the remainder on the defendant. The defendant may point to
specific disbursements indicating that he is no longer in
possession of funds obtained as a result of his crimes or assets
purchased therewith. "Unless [the defendant] can disprove
possession of any remaining amount in this manner, the court may
consider the resulting figure as constituting 'financial resources
of the defendant.'" Id.
In light of our decision in Copple II, which was filed
after briefing and argument in this case had been completed, we see
no basis for setting aside the district court's restitution award
as an abuse of discretion. In fact, the district court's analysis
was prescient in that it essentially employed the framework
contemplated by Copple II for ordering restitution where there is
reason to believe that a defendant has secreted proceeds from
illegal activity. Relying on Copple II, we divide our analysis
into two parts. We first determine whether the district court's
finding that Voigt had secreted the proceeds of his crime, thereby
shifting to him the burden to explain their whereabouts, was an
abuse of discretion. We then determine whether the district
court's ultimate restitution order constituted an abuse of
discretion given that the burden of persuasion as to the location
of the proceeds, as well as on financial resources and ability to
pay, had shifted to defendant. Copple II, 74 F.3d at 484; 18
U.S.C. Section 3664(d).
That the district court was entitled to proceed with the sort of analysis contemplated in Copple II cannot seriously be disputed. The district court's restitution order, along with the evidence at trial, provided ample basis for the court's conclusion that Voigt had attempted to secrete the proceeds of his criminal activity in foreign bank accounts and in his former girlfriend's name.
Since there is evidence in the record to support the district court's "reasonable apprehension that [Voigt] has secreted certain assets," Copple II, 74 F.3d at 484, the derivation of a "starting point" and the concomitant shifting of the burden to the defendant cannot constitute an abuse of discretion.
To the extent that Voigt complains that the district court's starting point ($7,040,000) did not represent the amount of his actual holdings at sentencing, he misses the point.
Copple II makes clear that once the district court has reasonably concluded
that the defendant is concealing the proceeds of his crime, the
district court may use as a starting point the entire amount of the
loss caused minus any amount already accounted for (in this case,
the amount sought by the government in forfeiture).
Again, we see no abuse of discretion in the district court's decision to require Voigt to account for the entire $7,040,000.
The essence of Voigt's complaint is that the district
court's ultimate restitution award was the same amount as the
starting point it had derived. Voigt assails the district court's
failure to make specific findings on his ability to pay or on his
financial resources. But under Copple II and 18 U.S.C. Section 3664(d),
it was Voigt who bore the burden of persuasion (and, logically, the
burden of production) on whether he possessed the $7,040,000 in
crime proceeds and on the issue of his financial resources and
needs. Voigt failed to adduce sufficient evidence on either
subject. For instance, Voigt never submitted to the Probation
Department a completed Personal Financial Statement form. Instead,
he claimed that he was "living off savings and other assets," yet
never accounted for the source of those funds. This was simply
insufficient to demonstrate by a preponderance of the evidence his
financial resources and needs. United States v. Cannistraro, 871
F.2d 1210, 1214 (3d Cir. 1989) (no abuse of discretion where
restitution amount not reduced to reflect ability to pay when
defendant fails to adduce evidence on that subject).
Given Voigt's complete failure to meet his statutory burden of demonstrating his financial resources and needs, it is not surprising that the district court was unable to announce "specific findings" on that subject.
Quite simply, because Voigt had failed to account for the $7,040,000 in crime proceeds, and
because he failed to adduce sufficient evidence on his ability to pay and financial needs, the district court had no choice but to impose what had been its "starting point" as the final amount of restitution. Such a result is entirely "consistent with . . . our policy-based conviction that defendants ought not be permitted to profit, quite literally, from uncertainty for which their illegal conduct is ultimately responsible." Copple II, 74 F.2d at 484.
Put another way,
if the government bore the burden of proving
that such defendants still possess illegally
obtained assets, the government would be
unable to locate hidden assets, those assets
would not be taken into account in framing
restitution orders, and the defendants would
continue to profit at the expense of the
innocent victims. This would be
The solution is to place the burden of
proof on the defendant to show what has
happened to all of the illegally obtained
All assets for which the defendant
cannot account may be included in the amount
of restitution ordered. To the extent that
records are unavailable, the risk of
inaccuracy should be borne by the defendant
rather than the victims. Id. at 486 (Alito, J.,
concurring) (citation omitted).
Finally, we do not view the district court's decision to
accept Voigt's representations of indigency for purposes of
appointing appellate counsel as mandating a contrary result. The
district court explained that it did so simply to expedite Voigt's
appeal. In United States v. Hallman, 23 F.3d 821, 827 (3d Cir.),
cert. denied, 115 S. Ct. 216 (1994), we held that a finding of
indigence at the time of sentencing is not a bar to imposing
restitution as long as the award is based "on realistic prospects
that the defendant will be able to pay it, and not on fantastic or
overly speculative possibilities." Copple II, 74 F.3d at 485.
Given the district court's record-supported findings that Voigt
concealed substantial sums of crime proceeds, and given Voigt's
failure to rebut those findings with competent evidence, the
district court's restitution order was based on "realistic
prospects that the defendant will be able to pay it . . ." Id.
THE MOTIONS FOR SEVERANCE
Finally, Voigt argues that the district court erred in denying his motions to sever his trial from those of his codefendants on the ground of mutually antagonistic defenses, and that his convictions must therefore be reversed.
The district court's denial of Voigt's motion is reviewable only for abuse of discretion. United States v. Thornton, 1 F.3d 149, 152 (3d Cir.), cert. denied, 114 S. Ct. 483 (1993).
In appealing his conviction on this ground, Voigt faces an uphill battle. As the Supreme Court has recently noted, "[t]here is a preference in the federal system for joint trials of defendants who are indicted together." Zafiro v. United States, 506 U.S. 534, 113 S. Ct. 933, 937 (1993). See Fed. R. Crim. P. 8(b)
("Two or more defendants may be charged in the same indictment or
information if they are alleged to have participated in the same
act or transaction or in the same series of acts or transactions
constituting an offense or offenses.").
Such joint trials promote efficiency in the courts and serve the interests
of justice by preventing "the scandal and inequity of inconsistent verdicts."
Zafiro, 506 U.S. at 537, 113 S. Ct. at 937 (quoting Richardson v.
Marsh, 481 U.S. 200, 209, 107 S. Ct. 1701, 1708 (1987)).
In addition, joint trials of defendants charged under a single
conspiracy aid the finder of fact in determining the "full extent
of the conspiracy," United States v. Provenzano, 688 F.2d 194, 199
(3d Cir.), cert. denied, 459 U.S. 1071, 103 S. Ct. 492 (1982), and
prevent "the tactical disadvantage to the government from
disclosure of its case." United States v. Jackson, 649 F.2d 967,
973 (3d Cir.), cert. denied, 454 U.S. 1034, 102 S. Ct. 574 (1981).
As a result, when defendants have been properly joined
pursuant to Rule 8(b) of the Federal Rules of Criminal Procedure,
"a district court should grant a severance under Rule 14 only if
there is a serious risk that a joint trial would compromise a
specific trial right of one of the defendants, or prevent the jury
from making a reliable judgment about guilt or innocence." Zafiro,
506 U.S. at 539, 113 S. Ct. at 938. See Fed. R. Crim. P. 14 ("If it
appears that a defendant or the government is prejudiced by a
joinder of . . . defendants . . . for trial together, the court may
order an election or separate trials of counts, grant a severance
of defendants or provide whatever other relief justice requires.").
Many courts have recognized that such a risk arises when
codefendants assert "mutually antagonistic" defenses. See Zafiro,
506 U.S. at 538, 113 S. Ct. at 937 (collecting cases). Even where
a defendant establishes that his defense and those of his
codefendants are mutually antagonistic, however, severance is not
mandatory. Id., 113 S. Ct. at 938. Mutually antagonistic defenses
are not prejudicial per se; and even if they were, Rule 14 "leaves
the tailoring of the relief to be granted, if any, to the district
court's sound discretion." Id. at 539, 113 S. Ct. at 938.
Therefore, to obtain a reversal of conviction for failure to sever
where codefendants assert mutually antagonistic defenses, a
defendant "must demonstrate clear and substantial prejudice
resulting in a manifestly unfair trial." United States v.
Reicherter, 647 F.2d 397, 400 (3d Cir. 1981).
Although precise articulations may differ, courts agree
that "[m]utually exclusive defenses . . . exist when acquittal of
one codefendant would necessarily call for the conviction of the
other." United States v. Tootick, 952 F.2d 1078, 1081 (9th Cir.
1991). This type of situation arises "when one person's claim of
innocence is predicated solely on the guilt of a co-defendant."
United States v. Harris, 9 F.3d 493, 501 (6th Cir. 1993).
In determining whether mutually antagonistic defenses exist such that
severance may be required, the court must ascertain whether "the
jury could reasonably construct a sequence of events that
accommodates the essence of all appellants' defenses." United
States v. Perez-Garcia, 904 F.2d 1534, 1548 (11th Cir. 1990).
While mutually antagonistic defenses have been much
discussed in theory, only rarely have courts found that they exist
in practice. See Zafiro, 506 U.S. at 538, 113 S. Ct. at 937; see
also Tootick, 952 F.2d at 1078 (finding mutually antagonistic
defenses warranting reversal where two defendants charged with
assault both defended themselves by arguing that the other
committed the assault alone). Far more frequently, courts have
concluded that the asserted defenses, while in conflict with one
another, are not so irreconcilable that "[t]he jury could not have
been able to assess the guilt or innocence of the defendants on an
individual and independent basis." Tootick, 952 F.2d at 1083.
See, e.g., United States v. Flanagan, 34 F.3d 949, 952 (10th Cir.
1994) (affirming denial of motion to sever because a jury "could
logically" accept one defendant's defense without concluding that
the codefendant was guilty, and vice versa); Harris, 9 F.3d at 501
(affirming denial of motion to sever trials of coconspirators, one
of whom claimed innocence and the other of whom claimed entrapment,
on the ground that these defenses are not inconsistent because the
jury could logically have accepted both); Perez-Garcia, 904 F.2d at
1548 (affirming denial of motion to sever because "the jury could
reasonably construct a sequence of events that accommodates the
essence of all appellants' defenses").
Moreover, courts have consistently held that finger-
pointing and blame-shifting among coconspirators do not support a
finding of mutually antagonistic defenses. See Provenzano, 688
F.2d at 198 (affirming denial of motion to sever where all
defendants blamed one coconspirator on the ground that these
defenses were not antagonistic, because if jury had believed that
only one defendant was to blame there would have been a failure of
proof on the conspiracy charges); see also United States v. Smith,
44 F.3d 1259, 1266-67 (4th Cir.) (affirming denial of motion to
sever where defendant's codefendants claimed that he ran the whole
scheme and they were just victims of his criminal influence), cert.
denied, 115 S. Ct. 1970 (1995); United States v. Linn, 31 F.3d 987,
992 (10th Cir. 1994) (affirming denial of motion to sever where
each coconspirator defended himself by blaming the others on the
ground that the jury could have believed all defendants' theories
and acquitted them all); United States v. Rivera, 6 F.3d 431, 438
(7th Cir. 1993) (affirming denial of motion to sever where
codefendants in a drug conspiracy all claimed ignorance and blamed
each other on ground that "plain and simple blame-shifting" does
not necessarily prevent jury from making reliable judgment about
guilt or innocence), cert. denied, 114 S. Ct. 1098 (1994); United
States v. Barber, 442 F.2d 517, 530 (3d Cir.) (holding that "the
mere presence of hostility among defendants or the desire of one to
exculpate himself by inculpating another" are insufficient grounds
to require severance), cert. denied, 404 U.S. 958, 92 S. Ct. 327
These cases illustrate the well-settled principle that
"defendants are not entitled to severance merely because they may
have a better chance of acquittal in separate trials." Zafiro, 504
U.S. at 540, 113 S. Ct. at 938.
Voigt's argument is essentially indistinguishable from
those that were rejected in the conspiracy cases cited above. The
basis of his claim is that his codefendants "directed blame at
[him] as the architect of the scheme . . . ." Smith, 44 F.3d at
1267. Travis argued throughout the trial that Voigt had deceived
her, and that "[s]he was one of the victims of John Voigt." App.
at 985 (Travis' counsel's closing argument). Similarly, Anderskow
and Anchors argued that they were pawns in a scheme created and
perpetrated by John Voigt.
Voigt contends that "the defenses presented [by his codefendants] would, in order to have succeeded, have required defendant Voigt's conviction, and certainly enhanced that possibility." Voigt's Br. at 30.
In light of the case law and on logical grounds, we disagree.
The basic theory behind the defenses of Travis, Anderskow, and Anchors was that they lacked criminal intent.
Although it is fairly clear that these defenses, by pointing the finger of blame at Voigt, increased the likelihood that Voigt would be convicted.
The Supreme Court has stated that this type of injury alone does not mandate severance. Zafiro, 506 U.S. at 540, 113 S. Ct. at 938.
As the government correctly argued
in its brief, "it was not logically impossible for the jury to have
either (i) disbelieved all of the defenses, given the government's
affirmative proof or (ii) believed all of them, on the basis that
the government had not adduced sufficient evidence of intent."
Government's Br. at 39. Under these circumstances, we cannot
conclude that the defenses in this case were mutually antagonistic.
The limiting instructions that the district court gave to
the jury reinforce our conclusion. See Smith, 44 F.3d at 1267;
Rivera, 6 F.3d at 438. The court instructed the jury (1) to
"consider each count of the indictment and each defendant's
involvement in that count separately," (2) that "the burden is
always on the prosecution to prove guilt beyond a reasonable
doubt," (3) that its "verdict as to any defendant on any count
should not control [its] verdict as to any other defendant or any
other count," and (4) that opening statements and closing arguments
are not evidence. Anderskow's App. at 4251, 4257 & 4278. We are
convinced that these instructions "were sufficient to cure any
potential prejudice from antagonistic defenses." Rivera, 6 F.3d at
438 (relying on similar instructions). We therefore conclude that
the district court did not abuse its discretion in denying Voigt's
motions for a severance.
We will affirm Voigt's conspiracy, money laundering and tax evasion convictions, as well as the district court's order of restitution.
We will vacate the forfeiture order, which is incorporated into the judgment of conviction and sentence, and remand for further proceedings consistent with this opinion.
AUSA Paul Zoubek, who worked with FBI Agent Powell, is now in private practice.
AUSA Zoubek and FBI Agent Powell know the extent of involvement of Gabriel MacEnroe and William P. Caraluzzi in the EAMFT case (above).
Inmate Register Number: 17140-050
Name: JOHN J VOIGT
Projected Release Date: 18DEC07
DEVENS Federal Medical Center
P.O. BOX 880
Ayer, Massachusetts 01432
TEL: (978) 796-1000
- - - -
Inmate Register Number: 05320-424
Name: RALPH A. ANDERSKOW
Date Released: 5/14/02
- - - -
Inmate Register Number: 04861-068
Name: DONALD ANCHORS
Date Released: 12/31/98
- - - -
Inmate Register Number: 47145-004
Name: SOLIS ALEVY
Date Released: 1/22/97
In the following U.S. federal civil case (offense date 1996) below, Gabriel MacEnroe brought his client named, Raymond Keith Richards (INSULPAK) to place his investment monies with a friend of MacEnroe’s named, Ivo George Caytas. Richards made three (3) $20-million dollar investments for a grand total of $60,000,000.00 dollars. MacEnroe was paid his 1% commission and Caytas collected his 1% commission from Richards up-front. Caytas then turned over Richards $60,000,000.00 to a man named Willy Farah, U.S.-based ‘department store manager’ posing as an investment for Arab royalty.
Raymond Richards lives in Monaco. His primary company INSULPAK is a European ‘heavy equipment steel machine parts’ firm, whose competitor is believed to be a firm named, CARONI in Brazil. MacEnroe is believed to be a foreign financial business espionage agent for a man named, Dr. Luciano Caroni, who lives in Switzerland.
Docket as of January 11, 2002 0:03 am
Proceedings include all events. 12BK SCHEDO
U.S. District Court
District of New Jersey (Newark, New Jersey)
Assigned to: Judge Joseph A. Greenaway Jr.
Jury demand: Both
Nature of Suit: 370
Lead Docket: None
Dkt# in other court: None
Cause: 28:1332 Diversity-Fraud
RICHARDS v. PNC BANK N.A.
CIVIL DOCKET FOR CASE #: 00-CV-952
RAYMOND KEITH RICHARDS, Plaintiff
PNC BANK, N.A., Defendant
RAYMOND KEITH RICHARDS,
[COR LD NTC]
THOMAS F. QUINN
WILSON, ELSER, MOSKOWITZ,
EDELMAN & DICKER, LLP
33 WASHINGTON STREET
NEWARK, NJ 07102
PNC BANK N.A., as successor to MIDLANTIC BANK,
[COR LD NTC]
ALLEN E. MOLNAR
HARRIS BEACH, LLP
TWO GATEWAY CENTER
NEWARK, NJ 07102
PNC BANK N.A.,
[COR LD NTC]
ALLEN E. MOLNAR
HARRIS BEACH, LLP
TWO GATEWAY CENTER
NEWARK, NJ 07102
IVO GEORGE CAYTAS,
COMMERCIAL CAPITAL ESTABLISHMENT [NOTE: Gabriel MacEnroe Liechtenstein registered company, also operating from St. Gallen, Switzerland]
EDWIN D. WILKINSON
JOHN DOE 1-10
JANE DOES 1-10
DOE BUSINESS ASSOCIATIONS 1-10,
Docket as of January 11, 2002 0:03 am Page 3
Proceedings include all events. 12BK SCHEDO 2:00cv952 RICHARDS v. PNC BANK, N.A.
2/29/00 1 COMPLAINT filed; jury demand FILING FEE $ 150.00 RECEIPT # 280531 (dr) [Entry date 03/06/00]
2/29/00 2 NOTICE of Allocation and Assignment filed. Magistrate Judge DENNIS M. CAVANAUGH (dr) [Entry date 03/06/00]
3/9/00 -- SUMMONS(ES) issued for PNC BANK, N.A. ( 20 Days) (Immed to Counsel) (dr)
3/9/00 3 MOTION AND CLERK'S ORDER, appointing special process server (to serve Summons and Cmp on Deft)filed. (dr)
5/16/00 4 APPLICATION by PNC BANK, N.A. and Clerk's Order extending time to answer. Answer due 6/1/00 for PNC BANK, N.A. (bl) [Entry date 05/18/00]
5/23/00 5 RETURN OF SERVICE executed as to PNC BANK, N.A. 4/24/00 (bl) [Entry date 05/25/00]
5/24/00 6 Letter ORDER, set scheduling conference for 6/19/00n.m. (signed by Mag. Judge Dennis M. Cavanaugh ) (bl) [Entry date 05/26/00]
6/8/00 7 ANSWER to Complaint and Jury demand by PNC BANK, N.A. (bl) [Entry date 06/09/00]
6/8/00 8 CERTIFICATE OF SERVICE by PNC BANK, N.A. of answer and jury demand (bl) [Entry date 06/09/00]
6/8/00 9 REQUEST BY RAYMOND KEITH RICHARDS FOR DEFAULT AGAINST PNC
BANK, N.A. (answer submitted) (bl) [Entry date 06/09/00]
6/12/00 10 LETTER By RAYMOND KEITH RICHARDS withdrawing request for default (bl) [Entry date 06/13/00] [Edit date 09/25/00]
6/26/00 11 SCHEDULING ORDER setting Discovery cutoff 12/1/00; Status conference 9/25/00; Settlement conference 10/10/00; Dispositive Motion due on or before 10/10/00. n.m. (signed by Mag. Judge Dennis M. Cavanaugh ) (bl)
7/20/00 12 Notice of MOTION to amend [7-1] answer to add a third party complaint by PNC BANK, N.A., Motion set for 9/11/00 on [12-1] motion and cert. of service . (Letter Brief/PO Subm) (bl) [Entry date 07/24/00]
7/20/00 13 DECLARATION of Allen E. Molnar on behalf of PNC BANK, N.A. Re: [12-1] motion to amend [7-1] answer & add third party complaint (bl) [Entry date 07/24/00]
8/4/00 -- Notice of Intent to submit a Dispositive motion by PNC BANK, N.A. for Summary Judgment (bl)
Docket as of January 11, 2002 0:03 am Page 4
Proceedings include all events. 12BK SCHEDO
2:00cv952 RICHARDS v. PNC BANK, N.A.
8/10/00 14 APPLICATION for Paul H. Silverman and William M. Barron to appear pro hac vice by RAYMOND KEITH RICHARDS (copy to chambers with order) (RG) [Entry date 08/11/00]
8/10/00 15 AFFIDAVIT of Paul H. Silverman on behalf of RAYMOND KEITH RICHARDS Re: [14-2] application (RG) [Entry date 08/11/00]
8/10/00 16 AFFIDAVIT of William M. Barron, Esq. on behalf of RAYMOND KEITH RICHARDS Re: [14-2] application (RG) [Entry date 08/11/00]
8/11/00 17 ORDER, for Paul H. Siverman and William M. Barron to appear pro hac vicen.m. ( signed by Mag. Judge Dennis M. Cavanaugh ) (bl) [Entry date 08/14/00]
8/21/00 18 ORDER, for Paul H. Silverman and William M. Barron to appear pro hac vice n.m. ( signed by Mag. Judge Dennis M. Cavanaugh ) (bl) [Entry date 08/22/00]
8/22/00 19 DECLARATION of Torsten M. Kracht on behalf of RAYMOND KEITH RICHARDS in support of pltf's opposition to deft's motion for summary judgment w/affidavit of service attached (brief submitted) (jd) [Entry date 08/25/00]
8/29/00 20 Notice of MOTION for summary judgment by PNC BANK, N.A., Motion set for 9/25/00 on [20-1] motion and cert. of service. (Brief/PO Subm) (bl)
8/29/00 21 DECLARATION of Allen E. Molnar on behalf of PNC BANK, N.A. Re: [20-1] motion for summary judgment (bl)
9/1/00 22 CERTIFICATE OF SERVICE by RAYMOND KEITH RICHARDS in opposition to deft's motion to disqualify counsel (bl) [Entry date 09/05/00]
9/1/00 23 CERTIFICATE OF SERVICE of Plaintiff's Brief in Opposition to Defendant's Motion by RAYMOND KEITH RICHARDS (DR) [Entry date 09/06/00]
9/15/00 24 Letter Order granting in part, denying in part [12-1] motion to amend [7-1] answer/granting DEFT's motion to amend and add a third party deft. and denying PNC's motion to amend answer to add Willy Farah as a third-party and directing deft. to add a third party complaint and file amended answer within 10 days. n.m. ( signed by Mag. Judge Dennis M. Cavanaugh ) (bl) [Entry date 09/18/00]
9/22/00 25 Minute entry: Proceedings recorded by Ct-Reporter: none; Minutes of: 9/18/00; The following actions were taken, granting in part, denying in part [12-1] motion to amend [7-1] answer By Judge Harold A. Ackerman (bl) [Entry date 09/25/00]
Docket as of January 11, 2002 0:03 am Page 5
Proceedings include all events. 12BK SCHEDO
2:00cv952 RICHARDS v. PNC BANK, N.A.
9/29/00 26 Minute entry: Proceedings recorded by Ct-Reporter: none; Minutes of: 9/29/00; The following actions were taken, [20-1] motion for summary judgment taken under advisement per rule 78. By Judge Harold A. Ackerman (bl) [Entry date 10/02/00]
10/3/00 27 AMENDED ANSWER to Complaint by PNC BANK, N.A. : amends [7-1] answer; jury demand (bl) [Entry date 10/05/00]
10/3/00 27 THIRD-PARTY COMPLAINT by PNC BANK, N.A. against IVO GEORGE CAYTAS, GABRIEL MCENROE, ARTHUR THOMPSON, EDWIN D. WILKINSON, COMMERCIAL CAPITAL EST., JOHN DOES 1-10, JANE DOES 1-10, DOE BUSINESS ASSOCIATION and JURY DEMAND (bl) [Entry date 10/05/00]
10/30/00 -- SUMMONS on Third party complaint issued for GABRIEL MCENROE, ARTHUR THOMPSON, EDWIN D. WILKINSON ( 20 Days) (Mailed to Counsel to counsel with USM 94) (bl) [Entry date 10/31/00]
11/28/00 28 Substitute attorney for PNC BANK, N.A. ; Terminated attorney ALLEN E. MOLNAR for PNC BANK, N.A., attorney ALLEN E. MOLNAR for PNC BANK, N.A. ; Added, (bl) [Entry date 12/01/00]
2/21/01 29 Return of service unexecuted as to EDWIN D. WILKINSON for service in London England (bl) [Entry date 02/26/01]
3/19/01 30 NOTICE of change of New York Counsel firm name by RAYMOND KEITH RICHARDS (bl) [Entry date 03/22/01]
3/29/01 31 Return of service unexecuted as to ARTHUR THOMPSON at 23 Grosvenor, Crescent Mews, London, England, SWI 7EX (bl) [Entry date 04/04/01]
8/13/01 32 LETTER By PNC BANK re Notice of Appeal (cc chambers) (DS)
9/13/01 33 LETTER by Allen E. Molnar, Esq. re temporary disruption due to World Trade Center tragedy (bl) [Entry date 09/14/01]
1/7/02 34 ORDER of reassignment of action from Judge Ackerman to Judge Greenaway, Jr. nm ( signed by Chief Judge John W. Bissell ) (bl) [Entry date 01/10/02]
1/10/02 -- CASE reassigned from Judge Harold A. Ackerman to Judge Joseph A. Greenaway, Jr. (bl)
[END OF DOCKET: 2:00cv952]
- - - -
SELECT EVENTS FROM THE DOCKET REPORT FOR CASE: 2:00cv00952 FOR THE PERIOD 01/10/2002 to 03/25/2002
1/10/02 -- CASE reassigned from Judge Harold A. Ackerman to Judge Joseph A. Greenaway, Jr. (bl)
2/22/02 35 Minute entry: Proceedings recorded by Ct-Reporter: none; Minutes of: 2/22/02; The following actions were taken, resetting motion hearing on [20-1] motion for summary judgment by PNC BANK, N.A. for 2:30 3/20/02 By Judge Joseph A. Greenaway, Jr. (bl) [Entry date 02/25/02]
Docket as of March 20, 2002 11:06 pm Page 6
Proceedings include all events. 12BB SCHEDO
2:00cv952 RICHARDS v. PNC BANK N.A.
3/19/02 36 Minute entry: Proceedings recorded by Ct-Reporter: none; Minutes of: 3/19/02; The following actions were taken, Status Conference; resetting oral argument on motion hearing on [20-1] motion for summary judgment by PNC BANK, N.A. for 3/20/02 By Judge Joseph A. Jr. (bl) [Entry date 03/20/02]
[END OF DOCKET: 2:00-CV-952]
The following is a transcribed text copy of a U.S. federal criminal indictment against Gabriel MacEnroe, Joseph Silvestri (formerly sentenced under the ABSCAM FBI sting many years ago in New Jersey that sent one U.S. Congressman to prison); Silvestri is connected to the Trafficante Mafia Crime Family in Florida who was laundering money out of check cashing outlets to an offshore bank named, American International Bank (AIB), and David Alan Morgenstern (long time friend and business associate of Gabriel MacEnroe).
FBI agents arrested Gabriel MacEnroe on October 30, 2000 in Myrtle Beach, South Carolina for the following offenses alleged in the U.S. federal indictment (below).
The indictment mentions an “informant” who claims MacEnroe mentioned he had working relationships with the U.S. Treasury Department, U.S. Central Intelligence Agency (CIA), U.S. National Security Agency (NSA), U.S. Federal Bureau of Investigation (FBI), and the Federal Reserve Bank (FED).
The “informant” mentioned was a man named, Vernon W. Shiflett, who recruited students, out of his business office (G.E. CAPITAL) located on the campus of the University of Ohio, for employment with the U.S. National Security Agency.
Online newspaper reports indicate that Shiflett had several curious business dealings, which almost got him arrested, however instead of going to prison, he just paid of the complaining parties with millions of dollars and was never charged in Ohio. [See news sources in Columbus, Ohio and Cincinnati, Ohio such as: http://www.marionstar.com/news/stories/20020424/localnews/202445.html
A part of the FBI sting operation known as Operation Sweet Tea Masquerade Party, Gabriel MacEnroe’s long time business friend David Alan Morgenstern represented to Joseph Silvestri he controlled of multiple millions invested by amongst others, client’s of Vernon W. Shiflett (FBI informant and witness) in an investment program named CHEMICAL TRUST (Seneca, South Carolina) run by Virgil Womack, and that through MacEnroe’s influential Swiss lawyers and other connections everyone stood to make a fortune in the program.
Weeks before the arrests of Morgenstern, Silvestri, and MacEnroe (in Myrtle Beach, South Carolina) Virgil Womack was arrested, indicted, charged, and eventually convicted in the related U.S. federal criminal case of United States of America v. Virgil Womack, et al. for having defrauded over 1,300 investors out of over $60,000,000.00 dollars in the CHEMICAL TRUST investment program.
Here (below) is a transcribed text copy of the U.S. indictment against MacEnroe, Morgenstern, and Silvestri that outlines what was claimed to FBI informant Vernon W. Shiflett:
IN THE DISTRICT COURT OF THE UNITED STATES
FOR THE DISTRICT OF SOUTH CAROLINA
UNITED STATES OF AMERICA
18 USC 371
18 USC § 1343
18 USC 2
GABRIEL MACENROE, and
THE GRAND JURY CHARGES THAT:
At all times relevant to this Indictment:
1. DAVID MORGENSTERN maintained a residence in Boca Raton, Florida and London, England; and marketed fraudulent high-yield investment opportunities.
2. GABRIEL MACENROE maintained a residence in St. Gallen, Switzerland, where he also operated a business known as "Commercial Capital Establishment and also marketed high-yield investment opportunities.
3. JOSEPH SILVESTRI, resided in West Palm Beach Florida, and was a self-described investment broker who facilitated the introduction of DAVID MORGENSTERN to a witness secretly cooperating with U.S. law enforcement authorities.
B. THE FRAUD CONSPIRACY AND ITS OBJECTS Beginning in or about February 2000 and continuing to October 30, 2000, in the District of South Carolina and elsewhere, the defendants DAVID MORGENSTERN, GABRIEL MACENROE, and JOSEPH SILVESTRI and others, both known and unknown to the Grand Jury, did knowingly and willfully combine, conspire, agree and have tacit understanding each with the other, to devise a scheme and artifice to defraud and to obtain money by means of false and fraudulent pretenses, representations and promises, and for the purpose of executing, such scheme and artifice, to transmit and cause to be transmitted in interstate and foreign commerce by means of wire communications certain writings, signs, signals and sounds in violation of Title 18, United States Code,‘ Section 1343.
C. MANNER AND MEANS OF THE FRAUD CONSPIRACY The unlawful conspiracy to defraud was to be accomplished and in fact was accomplished by the following means and in the following manner:
1. It was a part of the conspiracy and scheme to defraud for the defendants (also referred to herein as the co-conspirators) to devise a scheme to make, and to cause others to make, false and fraudulent representations and promises to an individual posing as a prospective investor who, in fact, was a witness cooperating with United States law enforcement authorities (herein referred to as the witness). The coconspirators made such representations for the purpose of inducing the witness to invest over 60 million dollars in a fraudulent private placement program" guaranteeing the witness incredible rates of return without any risk to his principal investment.
2. It was a further part of the fraud conspiracy for the coconspirators, in their effort to persuade the cooperating witness to invest in their scheme, to make representations to this witness that they could accomplish the recovery of millions of dollars unwittingly invested by the witness' clients and others in another investment scheme (herein referred to as the "Womack program").
3. It was a part of the conspiracy that in early February 2000, JOSEPH SILVESTRI met the witness, who worked as an insurance agent and investment advisor in Columbus, Ohio. JOSEPH SILVESTRI told the witness that DAVID MORGENSTERN had control of millions of dollars invested by the witness' clients and others in an investment program, which had been operated by Virgil Womack. (Womack, who lived in Seneca, South Carolina, was arrested several weeks earlier and indicted and charged in the matter of United States v. Virgil Womack, et al. with defrauding over 1300 investors across the country of over $60,000,000.00 through a fraudulent investment program known (among other names) as the Chemical Trust. In that case, the U.S. District Court appointed a receiver to be responsible for recovering these fraud proceeds for victimized investors.) JOSEPH SILVESTRI stated to the witness that he could prove, contrary to the government’s assertions, that Chemical Trust funds were in fact earning substantial rates of return under the control of DAVID MORGENSTERN, that he and others had expertise in "block trading programs" and that he (SILVESTRI), DAVID MORGENSTERN and another individual wanted someone to replace Womack in marketing a new investment program.
4. Having been previously interviewed by the FBI about investing his clients' funds in the Womack program, the witness contacted the FBI about his contact with JOSEPH SILVESTRI and thereafter agreed to cooperate with law enforcement officials in their investigation of JOSEPH SILVESTRI, DAVID MORGENSTERN and others acting in concert with these individuals.
5. It was a further part of the conspiracy that in the weeks and months following SILVESTRI'S initial contact with the witness, SILVESTRI arranged for the witness to speak to, and eventually meet, DAVID MORGENSTERN.
6. It was a further part of the conspiracy that DAVID MORGENSTERN promoted GABRIEL MACENROE as an individual with whom the witness would be "privileged" to be associated, and that GABRIEL MACENROE was an individual with the expertise to explain in detail the nature of the proposed investment program.
7. It was a further part of the conspiracy that JOSEPH SILVESTRI, DAVID MORGENSTERN AND GABRIEL MACENROE would and did make repeated interstate and international telephone calls to the witness, and met personally with the witness, during which they made false and misleading representations about various proposed investments, their backgrounds and expertise in sophisticated investment programs, their association with select international traders who could effectuate participation in guaranteed high-yield investment programs, and their relationship with and licenses from various governmental agencies sponsoring projects which could result in high investment returns. Such false statements and misrepresentations included, but were not limited to the following:
--That one proposed investment program was a National Security Agency (NSA) -approved adventure involving 52 satellites, which would be audited during the first three months by the NSA and then certified by the NSA;
--That the witness's $60,000,000 investment would be part of a $500,000,000 block of funds, and that the $60,000,000 would quickly rise to $100,000,000;
--That if the witness wanted the Central Intelligence Agency to control his investment, then that could be arranged;
--That the witness's investment would initially earn between 5% and 7% per week, then subsequently 20% per week, and that it could earn over 1000% and up to 1500% per year;
--That there would be no risk to the witness's money, that his money could be taken out of the bank account at any time, that the account was very liquid and that the witness must always be in control of his money;
--That government authorities would approve such investments;
--That GABRIEL MACENROE worked with the U.S. Treasury;
--That the Federal Reserve Bank engages in negotiations with GABRIEL MACENROE and/or his associates regarding the investments;
--That the Federal Reserve Bank sets up "mirror accounts" through which investments can be traded without any risk to the principal investment;
--That GABRIEL MACENROE had a license from the N.S.A.;
--That GABRIEL MACENROE was a C.I.A. Trustee;
--That GABRIEL MACENROE was an F.B.I. Collector and that MACENROE’S father was also an F.B.I. Collector;
--That GABRIEL MACENROE was "one of the five" Traders in the World who handle these types of investments;
8. It was a further part of the conspiracy that the coconspirators would and did send interstate and international facsimile transmissions to the witness and his associate (an undercover F.B.I. agent), and requested that the witness and his associate, cause interstate and international transmissions to be sent in furtherance of the coconspirators' efforts to persuade and cause the witness to invest in their fraudulent investment program.
9. It was a further part of the conspiracy that, in response to the cooperating witness's repeated inquiries about whether the millions of dollars invested in the Womack program could be transferred back to the court-appointed receiver, the coconspirators made statements to the cooperating witness suggesting to him that they could return such funds to the receiver. The coconspirators made such statements in an effort to convince the cooperating witness to invest millions of dollars in their fraudulent investment program and to refocus the criminal investigation in the Womack case away from them.
10. It was a further part of the conspiracy that the coconspirators arranged meetings with the witness not only in Columbus, Ohio and elsewhere but-also in Myrtle Beach, South Carolina, where they sought to finalize plans for the witness to invest in their fraudulent program.
D. OVERT ACTS IN FURTHERANCE OF THE FRAUD CONSPIRACY
In furtherance of the fraud conspiracy and to effect its aims and objects, the following acts, among others, were committed in the District of South Carolina, in Columbus, Ohio and elsewhere:
1. In early February 2000, JOSEPH SILVESTRI met with the witness in West Palm Beach, Florida, where he discussed his association with DAVID MORGENSTERN, their relationship with Womack, and their plans to have the witness replace Womack in a new investment program.
2. In March 2000, DAVID MORGENSTERN made a telephone call to the witness in Columbus, Ohio, during which DAVID MORGENSTERN invited the witness to come to London, England (where DAVID MORGENSTERN lived), to meet with him. During that call, DAVID MORGENSTERN also stated to the witness that he (DAVID MORGENSTERN) could prove where $27-million of Womack money was.
3. In June 2000, JOSEPH SILVESTRI contacted the witness by telephone and, along with another unnamed coconspirator, discussed the possibility of the witness being a conduit for the return of Womack program funds to the court-appointed receiver.
4. During the month of August 2000 and in early September 2000, JOSEPH SILVESTRI and another unnamed co-conspirator made numerous interstate telephone conversations during which JOSEPH SILVESTRI and the other unnamed co-conspirator discussed with the witness by phone the raising of millions of dollars through the witness's business for the new investment program and the fact that DAVID MORGENSTERN would actually invest these funds. In response to the witness's concerns about the loss of Womack program funds, JOSEPH SILVESTRI and the other unnamed coconspirator also discussed with the witness how the millions of dollars of Womack program funds could be returned to the court-appointed receiver.
5. In September 2000, DAVID MORGENSTERN spoke to the witness by phone, during which DAVID MORGENSTERN stated that it would be necessary for the witness to travel to London to meet DAVID MORGENSTERN’S business associate, GABRIEL MACENROE, who resided in St. Gallen, Switzerland.
6. On September 21, 2000, at the request of MORGENSTERN, the witness caused a facsimile transmission to be sent from Columbus, Ohio to David Morgenstern in London, England, which fax transmission was comprised of bank statements and documentation purporting to evidence the witness’s control over millions of dollars available for potential investment.
7. In early October 2000, Morgenstern told the witness to send to GABRIEL MACENROE information regarding the nature of the witness’s business, the amount of funds the witness wished to invest, and the witness’s availability to meet on October 5 and 6, 2000, with GABRIEL MACENROE and David Morgenstern.
8.In early October 2000, MACENROE caused a fax to be sent from St. Gallen, Switzerland, to the witness in Columbus, Ohio, inquiring about the witness’s ability to invest in the co-conspirator’s investment program, and received a fax from the witness regarding the witness’s participation in the investment program.
9. On October 6, 2000, DAVID MORGENSTERN met with the witness in Columbus, Ohio, where the witness posed detailed questions about their proposed investment program and DAVID MORGENSTERN'S and GABRIEL MACENROE’S role.
10. On or about October 7, 2000, DAVID MORGENSTERN wrote to GABRIEL MACENROE and stated that though the witness had, asked very detailed questions about the safety and nature of the investment, and that his meeting had gone extremely well, he (DAVID MORGENSTERN) only gave the witness "the basic mechanics of the transaction and gave him no specific answers, leaving it to GABRIEL MACENROE to brief him.
11. On October 16, 2000, GABRIEL MACENROE and DAVID MORGENSTERN met with the witness in Columbus, Ohio and described to him details of how their investment program would operate and how the witness's funds would be invested. GABRIEL MACENROE and DAVID MORGENSTERN also discussed the possibility of using some of the witness’s funds to pay the court-appointed receiver directly in order to disguise the source of the funds,
12. On October 29, 2000, GABRIEL MACENROE met with the witness's associate in Myrtle Beach, South Carolina and discussed his proposed fraudulent investment program.
13. On October 30, 2000, GABRIEL MACENROE met with the witness in Myrtle Beach, South Carolina and discussed the fraudulent investment program with the witness.
14. The wire communications set forth hereafter at Counts 2 through 4 are incorporated here and further alleged as though stated here as individual overt acts done in furtherance of the conspiracy.
All in violation of Title 18, United States Code, Section 371.
COUNTS 2 TO 4
USE OF THE WIRES TO FURTHER
THE SCHEME TO DEFRAUD
FAX and Phone instances were set forth here.
The GRAND JURY FURTHER CHARGES THAT:
Parts A and C of Count 1 of the Indictment are incorporated by reference as describing the ways, manner and means of executing the scheme to defraud on or about the dates enumerated below as to each Count, in the District of South Carolina, and for the purpose of executing the aforesaid scheme and artifice to defraud and for obtaining money and property by false and fraudulent pretenses, representations and promises, the defendants DAVID MORGENSTERN, GABRIEL MACENROE, and JOSEPH SILVESTRI did, and did aid, abet and assist one another to, knowingly and willfully transmit and caused to be transmitted by means of wire and foreign commerce the following writings, signals and sounds for the purpose of executing such scheme and artifice, to wit:
A True Bill
J. RENE JOSEY
DAVID C. STEPHENS
Assistant U.S. Attorney
JAMES R. PAVLOCK
Trial Attorney, Criminal Division U.S. Department of Justice
Gabriel Francis MacEnroe
DOB: February 1942
Gabriel F. MacEnroe is usually in his St. Gallen, Switzerland office (see below) by 09:00. On Tuesday his office arrivals are later in the morning between 11:00AM to 11:30AM believed due to a Heathrow Airport (UK) flight to Zurich, plus travel time to St. Gallen, Switzerland.
Gabriel Francis MacEnroe
CH-9000 St. Gallen
TEL: +41 071-278-65-87 (residence)
Dr. Tiffany Scales MacEnroe [MacEnroe’s wife]
Simon MacEnroe [MacEnroe’s son]
c/o CENTURY 21 REAL ESTATE
KENSINGTON PROPERTY SERVICES
281 Kensington High Street
London W8 6NA
TEL: 0207 3712100
FAX: 0207 3712101
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Gabriel MacEnroe other business associate information:
ABBA CONSULTANTS (near London, UK)
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COMMERCIAL CAPITAL FINANCE LTD. (registered in: Switzerland)
c/o BDO Visura, a Division of BDO International
St. Gallen, CH-9001
TEL: +41 071-228-62-00
TEL: +41 071-220-18-18
FAX: +41 071-228-62-62
Contact: Gabriel MacEnroe
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COMMERCIAL CAPITAL FINANCE LTD. (registered in: Switzerland)
c/o Büro Asamina Treuhand AG
CH-9000 St. Gallen
TEL: +41 071-223-42-40 (business)
TEL: +41 071-223-42-41
FAX: +41 071-223-42-34 (business)
FAX: +41 071-223-74-14
Secretary: Ms. Tran
Contact: Max Broder
Contact: Gabriel MacEnroe
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Max Broder, Trustee (eidg. dipl. Buchhalter – Buchhaltungsbüro)
9000 St. Gallen
TEL: +41 071-223-42-11 (Residence)
TEL: +41 079-689-36-68 (Mobile)
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Gabriel MacEnroe Liechtenstein-based attorney Walter Matt (below) who is believed to be who MacEnroe was verifying legitimacy of FIBG LTD. bank high-value asset instruments turned over to MacEnroe by FIBG LTD. bank CEO Mark Kennedy.
ANWALTS und TREUHANDKANZLEI - Law Office
Mitglied Eurojuris International
Walter Matt, LIC. IUR.
Werdenberger Weg 11
Contact: Walter Matt (attorney)
Those wishing to communicate experiences surrounding individuals along the lines of Gabriel MacEnroe, Robert Palm, William S. Sass, Paul V. Morse, Günter Horn, Michael G. Herzog, or others whom are believed to be offering high-value asset instruments claimed for use in supposedly secret high-yield trading programs, are invited to contact the author of this information report [ShoreLines], at: