Opinion
08 Civ. 694 (JFK).
February 11, 2009
For the United States of America: LEV L. DASSIN, Acting United States Attorney for the Southern District of New York, New York, New York, Of Counsel: Harry A. Chernoff, Assistant United States Attorney.
For Defendant: Michael Hurwitz, Esq., Hurwitz Stampur Roth, New York, New York.
OPINION AND ORDER
Defendant Michael Schlussel is charged by indictment with three counts: (1) conspiracy to commit mail fraud, in violation of 18 U.S.C. § 1349; (2) mail fraud, in violation of 18 U.S.C. § 1341; and (3) conspiracy to launder money, in violation of 18 U.S.C. § 1956(h). Trial is scheduled to begin on March 2, 2009.
Before the Court is the Government's request for pretrial rulings on the admissibility of certain evidence. The Government seeks rulings that it may admit the following evidence pursuant to Federal Rule of Evidence 404(b) or otherwise: (1) the Defendant's false statements in his application for appointed counsel; (2) the Defendant's false representations through counsel to the Court concerning the whereabouts of his passports; (3) Defendant's statements concerning the offenses charged in the indictment made in a letter to an Assistant U.S. Attorney in the Eastern District of New York. For the reasons outlined below, the Court rules that the first two items are admissible. Regarding the third item, the Court instructs the Government to specify by February 20, 2009, what portions of the letter it plans to introduce at trial.
I. BACKGROUND
The Government hopes to prove the following at trial, along with other facts.
A. Offense
From at least in or about September 2001 through in or about March 2008, Defendant conspired with others to defraud hundreds of companies through the mail with invoice-style solicitations designed to induce those companies to pay for goods that they had not ordered and would not receive. Specifically, Defendant and his co-conspirators mailed thousands of invoice-style solicitations to companies requesting payment purportedly for fluorescent light bulbs. A number of these companies made the requested payments, but Defendant and his co-conspirators did not send light bulbs in return. Defendant and his co-conspirators also established numerous shell companies with names such as "Mark Industries" and "Portland Industries" in an attempt to disguise ownership and control of the proceeds realized from their scheme.
B. Evidence at Issue 1. Application for Appointed Counsel
Following his arrest, Defendant filled out an application to obtain appointed counsel. In that application, he stated that he was not employed and he did not check the box that indicated self-employment. He further stated on the application that he had not received income from any business during that previous year. At the time, Defendant was the president of Alden, Curtis Michaels, a debt-collection agency. According to the Government, Defendant deposited some of the checks he received from his scheme into the collection agency's bank accounts. Additional evidence of the alleged scheme was discovered in the agency's offices.
2. Passports
In the course of several bail hearings in this case before it was reassigned to me, Defendant, through his counsel, made multiple false representations regarding his American and Israeli passports. At the initial bail hearing, Defendant's counsel stated, "Mr. Schlussel represents that both his passports are expired; and that, after an acrimonious divorce proceeding with his wife, she threw them both away." (Mar. 26, 2008, Tr. 6:3-6.) At an April 10, 2008, hearing, the Government proffered that Defendant's ex-wife denied this and additionally proffered that Defendant had traveled to Israel after his divorce, indicating that he still had at least one active passport at that time. (Apr. 10, 2008, Tr. 5:8-15.) At a July 28, 2008, hearing, Defendant, through new counsel, conceded that at least one of his passports was active. Defense counsel stated, however, "Mr. Schlussel doesn't know [where that passport is now], [and] doesn't have it." (July 28, 2008, Tr. 9:13-14.) At an October 20, 2008, the Government proffered that Ana-Maria Saegiu ("Saegiu"), Defendant's girlfriend, had revealed to the Government "that she had the passports, [and] that they were brought [to the apartment Saeigu and Defendant shared] by Mr. Schlussel." (Oct. 20, 2008, Tr. 9:20-21.) The Government further proffered that Saegiu had found the passports inside a closet in a bag along with $8,000 in cash.3. Letter to Assistant U.S. Attorney in the E.D.N.Y.
Several years ago, Defendant testified on behalf of the prosecution in an organized crime case in the Eastern District of New York (the "E.D.N.Y. Case"). Following his arrest in the instant case, on June 16, 2008, Defendant wrote a letter to the prosecutor in the E.D.N.Y. Case ("the E.D.N.Y. Prosecutor") and asked her to contact the Assistant U.S. Attorney in the instant case and explain Defendant's past assistance to the Government. Defendant further wrote, in relevant part,
I am facing 51 months for a simple mail fraud case which should be no more than 1/2 [year] on supervised release, but Guidelines push it to 51 months.
. . . .
I just want you to know that I did not profit from any money laundering or fraud I have been accused of. I was coerced into a situation because of my ex-wife's actions. . . .
. . . I again want you to know that I did not profit from actions [sic], I just fell into a quagmire that puts me as a bad businessman not a thief.
II. DISCUSSION A. Standard
"Evidence of a party's consciousness of guilt may be relevant if reasonable inferences can be drawn from it and if the evidence is probative of guilt." United States v. Perez, 387 F.3d 201, 209 (2d Cir. 2004). "Such evidence is admissible [under Rule 404(b)] if the court (1) determines that the evidence is offered for a purpose other than to prove the defendant's bad character or criminal propensity, (2) decides that the evidence is relevant and satisfies Rule 403, and (3) provides an appropriate instruction to the jury as to the limited purposes for which the evidence is introduced, if a limiting instruction is requested." Perez, 387 F.3d at 209 (citing United States v. Mickens, 926 F.2d 1323, 1328-29 (2d Cir. 1991). Notably, the Second Circuit "has long held an inclusionary approach" to evidence offered under Rule 404(b). United States v. Paulino, 445 F.3d 211, 221 (2d Cir. 2006).B. Analysis 1. Application for Appointed Counsel
A rational jury could infer that Defendant made false statements on his application for appointed counsel regarding his employment and income in order to distance himself from the debt-collection agency, which was directly linked to the alleged fraud. A rational jury could further infer that these false statements indicate Defendant's consciousness of guilt and are therefore probative of his actual guilt. Cf. United States v. Kahan, 415 U.S. 239 (1974) (finding no constitutional infirmity where, to show consciousness of guilt, trial court admitted defendant's false statement that he had no funds and needed appointed counsel).
The Government concedes that admission of this evidence may prejudice the Defendant or confuse the issues for the jury, such as by allowing the jury to conclude that Defendant lied in order to obtain free legal services. To reduce this danger, the Government offers to stipulate that the false statements were made, while excluding the fact that they were made on an application for appointed counsel.
Under these conditions, the Court rules that these false statements are admissible.
2. Passports
A rational jury could infer that, during his bail hearings, Defendant falsely represented to the Court through counsel that he did not know the whereabouts of his passports so that he could flee the country if he were released. Again, a rational jury could further infer that Defendant's misrepresentations and intent to flee reflected his consciousness of guilt. See United States v. Al-Sadawi, 432 F.3d 419, 424 (2d Cir. N.Y. 2005) ("It is well-settled that flight can, in some circumstances, evidence consciousness of guilt.").
Defendant argues that this is not evidence of actual flight but merely of preparation for flight and therefore it should not be admitted. Preparation for flight can also be probative of a defendant's consciousness of guilt, however. See Al-Sadawi, 432 F.3d at 424. In Al-Sadawi, the Second Circuit confronted a case in which the defendant's wife allegedly attempted to obtain U.S. passports and airline tickets purportedly for defendant and his wife to flee the country. The Court stated that "`[flight's] probative value as circumstantial evidence of guilt depends upon the degree of confidence with which four inferences can be drawn: (1) from the defendant's behavior to flight; (2) from flight to consciousness of guilt; (3) from consciousness of guilt to consciousness of guilt concerning the crime charged; and (4) from consciousness of guilt concerning the crime charged to actual guilt of the crime charged.'" United States v. Al-Sadawi, 432 F.3d 419, 424 (2d Cir. 2005) (quoting United States v. Myers, 550 F.2d 1036, 1049 (former 5th Cir. 1977)). The Second Circuit suggested that conduct in preparation of flight, such as attempting to obtain new passports and airline tickets, could support that first inference, namely, the inference that defendant intended to flee. Ultimately, the Second Circuit found in Al-Sadawi that, under the circumstances of the case, the behavior of defendant's wife was insufficient to support an inference that defendant himself intended to flee. Id. at 424-25.
The instant case does not present such a problem since Defendant, and not some third-party, is responsible for the behavior supporting an inference of flight. The Government proffers that it has a witness who will testify that Defendant secreted his two passports, along with $8,000 in cash, in a bag kept in the closet of his apartment. Nevertheless, during multiple bail hearings, Defendant repeatedly represented to the Court that he did not know the whereabouts of his passports and that they were not in his control. He persisted in these falsehoods even as it became clear that his refusal to turn over the passports was the primary obstacle to his obtaining bail. Apparently, defendant was interested in obtaining bail only if he also could reserve the ability to travel abroad once released. This reinforces the inference that he secreted the cash and travel documents in preparation for flight.
Defendant also argues that the evidence should be excluded because he did not flee while on bail prior to his remand. The Court agrees with the Government that this is an argument going to the weight of the evidence and not its admissibility. Defendant will have a chance at trial to persuade the jury that he did not intend to flee. See Robinson v. Keane, No. 92 civ. 6090, 1996 U.S. Dist. LEXIS 14453 (S.D.N.Y. Sept. 27, 1996) ("Where evidence of flight passes the threshold inquiry of relevance, the court should receive the evidence and permit defendant to introduce evidence in denial or explanation.").
Accordingly, defendant's false representations to the Court regarding his passports are admissible.
The Government states that it will not request a jury charge on this flight evidence.
3. Letter to the E.D.N.Y. Prosecutor
The Court declines to rule on the admissibility of the statements contained in Defendant's letter to the E.D.N.Y. Prosecutor until the Government clarifies what portions of the letter it seeks to introduce. So far, the Government has advised the Court in vague terms that it intends to offer those portions of the letter that are inculpatory and omit those that are exculpatory or irrelevant, at least to the extent the doctrine of completeness allows. Although the Government does quote specific passages from the letter in its instant submission, the Court is reluctant to assume that these constitute the entirety of what the Government intends to offer at trial. Defendant, for his part, argues, without knowing what the Government seeks to introduce, that the doctrine of completeness applies. The Court cannot assess these arguments in the abstract. Therefore, the Government is instructed to specify by February 20, 2009, what portions of the letter it will introduce.CONCLUSION
Defendant's false statements in his application for appointed counsel and Defendant's false representations regarding his passports are admissible. The Court will decide the admissibility of the statements in Defendant's letter to the E.D.N.Y. Prosecutor after the Government clarifies what portions seeks to introduce.