Bruno Motion To Bar Evidence Amend Indictment

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK ------------------------------------------------------- x

UNITED STATES OF AMERICA 09-CR-29 (GLS) v.

JOSEPH L. BRUNO, Defendant. ------------------------------------------------------- x

DEFENDANT JOSEPH L. BRUNO'S MEMORANDUM OF LAW IN SUPPORT OF HIS MOTION IN LIMINE TO EXCLUDE EVIDENCE AND TO BAR THE GOVERNMENT FROM CONSTRUCTIVELY AMENDING THE INDICTMENT OR CAUSING AN UNCONSTITUTIONAL VARIANCE AT TRIAL (DEFENDANT'S MOTION IN LIMINE #4)

Abbe David Lowell, Bar Number 106642 Paul M. Thompson Christopher D. Man McDermott Will & Emery LLP 600 13th Street, NW Washington, DC 20005 Phone: 202-756-8001 Facsimile: 202-756-8087 [email protected] William 1. Dreyer, Esq. Dreyer Boyaj ian LLP 75 Columbia Street Albany, NY 12210 Phone: 518-463-7784 Facsimile: 518-463-4039

Attorneys for Defendant Joseph L. Bruno

Defendant Joseph L. Bruno submits this Memorandum of Law in Support of his Motion

in Limine to Exclude Evidence and to Bar the Government from Constructively Amending the Indictment or Causing an Unconstitutional Variance at Trial, and further states as follows:

INTRODUCTION In the face of repeated challenges, the government has urged that it should be permitted to introduce at trial evidence ofMr. Bruno's alleged conduct spanning fourteen years-well before the statute-of-limitations period applicable to this case-on the theory that such evidence is relevant to Mr. Bruno's alleged creation of a single, long-running criminal scheme. Having made such a charge in the Indictment, the government must now be held to its word. If the government does not establish at trial that the disparate and unrelated conduct it alleged Mr. Bruno engaged with respect to various of his consulting firms' clients constituted a single, uniform scheme, then its theory-of-the-case at trial will impermissibly vary from the terms of the Indictment, creating an unconstitutional constructive variance. Whether or not the government is permitted to abandon its single-scheme theory in favor of a more limited approach, however, any evidence ofMr. Bruno's time-barred acts must be excluded at trial, as they are irrelevant and unduly prejudicial. In addition, the constitutional mandate against constructive amendment and/or variances from the Indictment requires that the government, in advance of trial, finally make clear which of its counts against Mr. Bruno are based upon the theory that he failed to disclose a conflict of interest and which upon the theory that he failed to disclose a unlawful gift.

ARGUMENT I.

The Government Is Constitutionally Required to Prove the "Single Scheme" to Defraud That It Alleged in the Indictment. The Indictment alleges that Mr. Bruno participated in a scheme to defraud the citizens of

the State of New York from 1993 to 2006. This alleged singular scheme involved 36 separate

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entities-20 different corporations, Indictment at ~~ 11-16, 60, and 16 different labor unions, Indictment at ~ 22. It further alleges potential misconduct relating to various contracts and agreements Mr. Bruno entered into over a 14-year period. But, despite the litany of companies and persons named in the Indictment and the lengthy 14-year time span alleged, the actual charges only relate to 9 of the 36 entities and involve mailings and/or wires from 2004 to 2006. Indictment at ~~ 65-66. Having justified the Indictment's breadth based on the claim that this historical conduct remains relevant to prove that Mr. Bruno participated in a single, long-ranging criminal scheme, the government cannot constitutionally abandon that argument at trial. The Sixth Amendment requires that a criminal defendant "be informed of the nature and cause of the accusation," U.S. Const., amend. VI, and the Fifth Amendment protects a defendant's "due process" trial rights. U.S. Const., amend. V; see also United States v. Salmonese, 352 F.3d 608, 619 (2d Cir. 2003) (requiring defendant to be "given notice of the core of criminality to be proven at trial"); United States v. Seeger, 303 F.2d 478 (2d Cir. 1962) (reversing conviction based on government's failure to provide defendant with fair notice of the charges against him). This constitutional guarantee binds the government to the theory of criminality it presented to the grand jury, lest it constructively amend the Indictment through its presentation of a different theory to the petit jury. "To prevail on a constructive amendment claim, a defendant must demonstrate that ... it is uncertain whether the defendant was convicted of conduct that was the subject of the grand jury's indictment." Salmonese, 352 F.3d at 620. Similarly, "[a] variance occurs when the charging terms of the indictment are left unaltered, but the evidence offered at trial proves facts materially different from those alleged in the indictment." Id. at 621. Both are forbidden under our Constitution.

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In this case, the government has consistently alleged that Mr. Bruno engaged in a single, wide-ranging criminal scheme to defraud-one that began in or about 1993 and continued through December 2006. Indictment at ~ 18; see also Dkt. No. 28, Gov't Omnibus Resp., at 28 (justifying references to time-barred conduct as relevant to "establish the existence of the single scheme alleged in the Indictment"). As a result, if the government abandons that theory at trial in favor of a more limited view, then it will have unconstitutionally varied from the charge in the Indictment. Having presented the case to the grand jury on one theory, the government cannot change course now-it must be held to the burden of proving that which it submitted to the grand jury. II.

With The Alleged Scheme As Charged, Evidence of Pre-Limitations Conduct Must Be Barred at Trial. Within the scheme that the government has charged, it still does not have free reign to

introduce evidence that is stale, of little relevance to the present case, and unduly prejudicial to Mr. Bruno. As the Court is aware, Mr. Bruno has repeatedly challenged the government's reliance on this stale conduct, including alleged conduct that dates long before the relevant statute oflimitations in this case. See, e.g., Dkt. Nos. 16,23. The government's response has been to insist that this evidence is somehow relevant to establish the existence of an alleged single criminal scheme. Dkt. No. 28, Gov't Omnibus Resp., at 28. If the government's theory of the case now changes-and the government seeks to prove multiple schemes-then the government has similarly abandoned the only basis upon which to allow it to present such evidence at trial. But even under the single-scheme theory, any marginal relevance that this evidence has is substantially outweighed by the danger of unfair prejudice and, therefore, inadmissible at trial.

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Having already set forth the legal bases for excluding this evidence in prior motions, Mr. Bruno will not detain the Court by repeating them in excessive detail here. See generally Dkt. Nos. 16, 23. Rather, as the Court has previously stated that the admissibility of this evidence would be best addressed as a trial issue, Dkt. No. 48 at 11, Mr. Bruno now renews his challenge to the admissibility of this stale evidence, for several reasons.

First, these prior alleged acts are irrelevant and unnecessary to prove anything in the government's case. For example, the government has labored to introduce time-barred allegations involving McGinn Smith, an investment banking and brokerage firm that allegedly paid Mr. Bruno over $630,000 to steer labor unions its way so it could execute the trades of union fund assets as directed by Wright Investors' Service ("Wright"). Indictment at ~~ 13, 21, 35-40. The indictment further alleges that Mr. Bruno received these payments from McGinn Smith from 1993 through 2005, and that Mr. Bruno concealed the source of this income in annual financial disclosure filings and failed to properly disclose his job duties for McGinn Smith in his request for an ethics opinion in 1993. None of these allegations are crimes that Mr. Bruno has been charged with in this case, nor are they necessary to prove any of the counts alleged in the indictment. McGinn Smith has not been named as an entity receiving or sending any of the alleged mailings or wires in the Indictment. Because none of the alleged counts involve mailings or wires that were sent to or received from McGinn Smith, there can be no allegation relating to McGinn Smith that makes it "more or less probable" that Mr. Bruno engaged in honest services fraud by failing to adequately report income he received from other

companies as alleged in counts 1-8 of the Indictment-unless the government wishes to make the exact type of conformity-of-conduct argument that is expressly prohibited. See Fed. R. Evid. 404(b). To allow the government to sneak in this kind of propensity character evidence under a

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lower standard than beyond a reasonable doubt would be unfairly prejudicial to Mr. Bruno and is prohibited under the federal rules and Second Circuit precedent. See Fed. R. Evid. 403, 404(b);

see also United States v. Quattrone, 441 F.3d 153 (2d Cir. 2006) (vacating conviction in part due to improper admission of extrinsic act evidence); Hynes v. Coughlin, 79 F.3d 285,292 (2d Cir. 1996) (reversing conviction where admission of extrinsic act evidence as a way to show criminal propensity held to be improper). Thus, Mr. Bruno's relationship with McGinn Smith, except for how McGinn Smith introduced him to Wright, is not relevant to the case and only serves to unfairly inflate the financial magnitude of the alleged scheme.' At trial, the government must prove beyond a reasonable doubt that Mr. Bruno intentionally committed honest services fraud through the use of the mails and wires from 2004 to 2006, the only actionable time period at issue. Events occurring prior to this time are not relevant and constitute unlawful propensity evidence barred under Rule 404(b).

Second, Federal Rule of Evidence 403 requires exclusion of these prior acts because they are unduly prejudicial to Mr. Bruno and unfairly magnify the size and scope of the alleged scheme. While the indictment alleges that Mr. Bruno has obtained over $3.1 million unlawfully, it fails to mention that this figure is largely comprised of funds Mr. Bruno allegedly received before 2004-for example, including over $630,000 that came from McGinn Smith. Indictment

Defendant Bruno will agree to stipulate that McGinn Smith introduced him to Wright, which is the only fact concerning McGinn Smith that is relevant to any charge alleged in the indictment. This kind of limitation protects both parties-it eliminates the need to subject Mr. Bruno to the risk of unfair prejudice while recognizing the prosecution's interest in introducing background facts to help the jury to understand the alleged charges. United States v. Anzalone, 783 F.2d 10, 12 (1st Cir. 1986) (recommending trial courts consider how some compromise or limitation may protect both parties' interests when determining whether to admit time-barred evidence).

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38. As McGinn Smith was not involved in any of the mailings or wire communications that

form the basis of the charges in the Indictment, payments it allegedly made to Mr. Bruno prior to the start of the statute oflimitations period have no bearing on this case, and are clearly being included simply to artificially inflate the apparent magnitude of the government's charges against Mr. Bruno. Similarly, the government included in its estimate $477,000 in payments from Leonard 1. Fassler and his affiliated companies from 1993 to June 2003, Indictment at ~ 42, conduct that certainly is time-barred. Furthermore, the government also sought to rely upon payments Mr. Bruno allegedly received from Wright Investors' Service from 1994 to June 2003, Indictment at ~ 21-more time-barred conduct that could account for hundreds of thousands of dollars. Even if the government were to suggest that such evidence is relevant to show background, knowledge, or intent, this is insufficient to overcome the balancing test under Federal Rules of Evidence 403. Where the court determines such evidence would be cumulative, confusing to the jury or unfairly prejudicial to the defendant, it must not be admitted. See, e.g.,

Nachamie, 101 F. Supp. 2d 134 (excluding prior similar act evidence upon finding of unfair prejudice to defendant). The term "unfair prejudice," as to a criminal defendant, speaks to the capacity of some concededly relevant evidence to lure the factfinder into declaring guilt on a ground different from proof specific to the offense charged.

Old Chief v. United States, 519 U. S. 172, 180 (1997). Where there is unfair prejudice to the defendant that substantially outweighs any probative value, exclusion is proper. See Malarkey, 983 F.2d 1204; Wingfield, 678 F. Supp. at 983 (granting defendant's motion in limine to exclude time-barred evidence because it would "confuse the jury, unfairly prejudice the defendant, and unduly delay the trial."). Where the government intends to offer voluminous evidence of the

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crimes charged, there is little reason why a trial court needs to prolong a trial by offering other acts alleged to have been committed by the defendant. See United States v. Basciano, 2006 WL 385325, at *6-7 (B.D.N.Y Feb. 17,2006). Thus, the Court should bar the government from introducing any such evidence at trial, as it is unduly prejudicial.

Third, neither mail or wire fraud constitute continuing offenses, so Mr. Bruno should not be made to defend against such stale charges. While Mr. Bruno recognizes that the statute of limitations does not serve as an absolute bar to the admission of pre-limitation evidence,

Fitzgerald v. Henderson, 251 F.3d 345, 365 (2d Cir. 2001), the purpose behind such limitations statutes is nevertheless important to the admissibility determination. As the Supreme Court recognized, the purpose of a statute of limitations is to "protect individuals from having to defend themselves against charges when the basic facts may have become obscured by the passage of time and to minimize the danger of official punishment because of acts in the fardistant past." United States v. Marion, 404 U.S. 307, 323 (1971). "Passage of time ... may impair memories, cause evidence to be lost, deprive the defendant of witnesses, and otherwise interfere with his ability to defend himself." Id. at 321,322 (holding limitations statutes provide "predictability by specifying a limit beyond which there is an irrebuttable presumption that a

defendant's right to afair trial would be prejudiced' (emphasis added)); United States v. RiveraVentura, 72 F.3d 277, 281 (2d Cir. 1995) (finding statutes oflimitations are "designed principally to protect individuals from having to defend themselves against charges supported by facts that are remote in time."). The Supreme Court cautions that federal courts should be reluctant to subject defendants to criminal prosecution for stale allegations occurring outside the applicable limitations period, and should do so only in rare circumstances where the alleged crime constitutes a continuing offense. Toussie v. United States, 397 U.S. 112, 115 (1970)

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(deeming an offense continuing for statute of limitation purposes only when "the explicit language of the substantive criminal statue compels such a conclusion, or the nature of the crime involved is such that Congress must assuredly have intended that it be treated as a continuing one")? Where, as here, the mail and wire fraud statutes "contemplate]'] an offense that can be completed in a single act," United States v. Rumore, 2008 WL 2755827, at *2 (S.D.N.Y. July 14, 2008), the offense cannot be considered continuing. Even where the defendant is charged with repeated violations of a federal fraud statute over a period of time pursuant to the same scheme, that does not transform this crime into a continuing offense for statute of limitations purposes.

United States v. Motz, 2009 WL 2486132 (E.D.N.Y. Aug. 14,2009) (granting partial dismissal upon finding that securities fraud statue did not constitute a continuing offense even where defendant allegedly committed multiple securities fraud violations); cf United States v. Rivlin, 2007 WL 4276712 (S.D.N.Y. Dec. 5, 2007) (finding embezzlement is not a continuing offense). Nowhere in the plain language of the mail or wire fraud statues is there any reference to them being continuous offenses. Thus, by the "explicit language" of these statutes, neither mail nor wire fraud can said to be continuing offenses. Toussie, 397 U.S. at 115. It makes little sense that acts that are too stale to be prosecuted directly should be allowed to be introduced at trial under a lower standard of proof to support the prosecution of unrelated activities falling within the limitations period. The government should not be permitted to bootstrap these stale unrelated allegations to bolster a weak case that amounts to, at most, state or

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Indeed, initial review of the Jencks material provided by the government confirms that many witnesses in the case simply do not remember facts going back fourteen years-making these archetypal stale-evidence concerns particularly relevant to this case.

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ethical law violations. This violates the spirit behind the enactment of statutes of limitations generally and, as stated above, it is not necessary for the government to prove conduct involving 27 unrelated entities when the charges alleged in the Indictment refer to nine specific entities and specific mailings and wires. The focus of the jury should relate to whether the government has met its burden with respect to Counts 1 through 8 and not on what Mr. Bruno's legitimate business activities were over a decade before the charges at issue. Thus, even if the government retains its single-scheme theory, the prejudicial impact inherent in allowing the government to bootstrap its case through stale accusations warrants exclusion of the evidence at trial. III.

The Government Should Be Required to Identify the Legal Theory for Each Count of the Indictment to Avoid the Possibility of an Unconstitutional Variance and/or Constructive Amendment to the Indictment. To provide Mr. Bruno the "fair notice" that is constitutionally mandated, Mr. Bruno

requests the Court also require the government to articulate the precise basis underlying each of its counts against him. Although the government has been clear that it general case against Mr. Bruno is based on the general theory that he committed honest services fraud by failing to disclose material information, it has not specified whether, on a count-by-count basis, it argues that Mr. Bruno failed to disclose either a conflict of interest or an unlawful gift. Understanding the government's legal theory behind each count in the Indictment is fundamental to Mr. Bruno's ability to mount an effective defense. Knowing what the government alleges that he failed to disclose and where those disclosures were supposed to be made is also critical to his ability to prepare for trial. Moreover, this request is necessary to assure that Mr. Bruno is not tried on allegations that are different than what the grand jury authorized-yet another unconstitutional constructive amendment to and/or variance from the Indictment. See Salmonese, 352 F.3d at 620. -9-

This concern is compounded by the government's most recent disclosures. Although the Indictment alleges that all ofMr. Bruno's alleged nondisclosures relate to the way in which Mr. Bruno filled out state ethics and financial disclosure forms, the discovery in this case now suggests that the government may also attempt to present a broader theory based on disclosures Mr. Bruno made or did not make to other authorities, including the press, labor unions, the Securities & Exchange Commission, and other members in the State legislature. To avoid any risk of an unconstitutional variance, the government should also be required to detail, by count, not only what information Mr. Bruno allegedly failed to disclose, but also exactly what he allegedly was required to reveal and where he was required to make such additional disclosures.

CONCLUSION Based on the foregoing, Mr. Bruno respectfully requests that the Court grant his Motion

in Limine to Bar the Government from Constructively Amending the Indictment or Causing an Unconstitutional Variance at Trial and order the relief contained herein.

Respectfully submitted, sf Abbe David Lowell Abbe David Lowell, Bar Number 106642 Paul M. Thompson Christopher D. Man McDermott Will & Emery LLP 600 13th Street, NW Washington, DC 20005 Phone: 202-756-8001 Facsimile: 202-756-8087 [email protected]

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William J. Dreyer, Esq . Dreyer Boyajian LLP 75 Columbia Street Albany, NY 12210 Phone: 518-463-7784 Facsimile: 518-463-4039

Attorney s for Defendant Joseph L. Bruno

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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK ------------------------------------------------------- x UNITED STATES OF AMERICA v.

Case No. 09-CR-29 (GLS) JOSEPH L. BRUNO, Defendant. ------------------------------------------------------- x

CERTIFICATE OF SERVICE I hereby certify that on October 13, 2009, I electronically filed the foregoing with the Clerk of the District Court using the CMlECF system, which sent notification of such filing to the following: 1.

Andrew T. Baxter, Esq. Acting United States Attorney Office of the United States Attorney - Albany 445 Broadway 218 James T. Foley US. Courthouse Albany, NY 12207-2924

2.

Elizabeth C. Coombe, Esq. Assistant US. Attorney Office of the United States Attorney - Albany 445 Broadway 218 James T. Foley US. Courthouse Albany, NY 12207-2924

3.

William C. Pericak, Esq. Assistant US. Attorney Office of the United States Attorney - Albany 445 Broadway 218 James T. Foley US. Courthouse Albany, NY 12207-2924

Is Abbe David Lowell

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