Bruno Motion to Bar Evidence Amend Indictment

8/14/2019 Bruno Motion to Bar Evidence Amend Indictment

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UNITED STATESDISTRICT COURTNORTHERNDISTRICT OF NEW YORK------------------------------------------------------- xUNITED STATES OF AMERICA

09-CR-29 (GLS)v.

JOSEPH L. BRUNO,Defendant.

------------------------------------------------------- x

DEFENDANT JOSEPH L. BRUNO'S MEMORANDUM OF LAW IN SUPPORT OF HISMOTION IN LIMINE TO EXCLUDE EVIDENCE AND TO BAR THE GOVERNMENTFROM CONSTRUCTIVELY AMENDING THE INDICTMENT OR CAUSING AN

UNCONSTITUTIONAL VARIANCE AT TRIAL(DEFENDANT'SMOTION IN LIMINE #4)

Abbe David Lowell, Bar Number 106642Paul M. ThompsonChristopher D. ManMcDermott Will & Emery LLP600 13th Street, NWWashington, DC 20005Phone: 202-756-8001Facsimile: [email protected] 1.Dreyer, Esq.Dreyer Boyaj ian LLP75 Columbia StreetAlbany, NY 12210Phone: 518-463-7784Facsimile: 518-463-4039Attorneys for Defendant Joseph L. Bruno


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Defendant Joseph L. Bruno submits this Memorandum ofLaw in Support of his Motionin Limine to Exclude Evidence and to Bar the Government from Constructively Amending theIndictment or Causing an Unconstitutional Variance at Trial, and further states as follows:

INTRODUCTIONIn 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-wellbefore the statute-of-limitations period applicable to this case-on the theory that such evidenceis relevant to Mr. Bruno's alleged creation of a single, long-running criminal scheme. Havingmade such a charge in the Indictment, the government must now be held to its word. If thegovernment 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 theIndictment, creating an unconstitutional constructive variance. Whether or not the government ispermitted 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 andunduly prejudicial. In addition, the constitutional mandate against constructive amendmentand/or variances from the Indictment requires that the government, in advance of trial, finallymake clear which of its counts against Mr. Bruno are based upon the theory that he failed todisclose a conflict of interest and which upon the theory that he failed to disclose a unlawful gift.

ARGUMENTI. 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 ofNew 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 andagreements Mr. Bruno entered into over a 14-year period. But, despite the litany of companiesand persons named in the Indictment and the lengthy 14-year time span alleged, the actualcharges 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 thishistorical conduct remains relevant to prove that Mr. Bruno participated in a single, long-rangingcriminal scheme, the government cannot constitutionally abandon that argument at trial.

The Sixth Amendment requires that a criminal defendant "be informed of the nature andcause of the accusation," U.S. Const., amend. VI, and the Fifth Amendment protects adefendant'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 coreof 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 thecharges against him). This constitutional guarantee binds the government to the theory ofcriminality it presented to the grand jury, lest it constructively amend the Indictment through itspresentation of a different theory to the petit jury. "To prevail on a constructive amendmentclaim, a defendant must demonstrate that . . . it is uncertain whether the defendant was convictedof 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, butthe evidence offered at trial proves facts materially different from those alleged in theindictment." 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 continuedthrough 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 singlescheme alleged in the Indictment"). As a result, if the government abandons that theory at trialin favor of a more limited view, then it will have unconstitutionally varied from the charge in theIndictment. Having presented the case to the grand jury on one theory, the government cannotchange course now-it must be held to the burden of proving that which it submitted to thegrand jury.II. With The Alleged Scheme As Charged, Evidence of Pre-Limitations ConductMust Be Barred at Trial.

Within the scheme that the government has charged, it still does not have free reign tointroduce evidence that is stale, of little relevance to the present case, and unduly prejudicial toMr. 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 relevantstatute oflimitations in this case. See, e.g., Dkt. Nos. 16,23. The government's response hasbeen to insist that this evidence is somehow relevant to establish the existence of an allegedsingle criminal scheme. Dkt. No. 28, Gov't Omnibus Resp., at 28. If the government's theory ofthe case now changes-and the government seeks to prove multiple schemes-then thegovernment has similarly abandoned the only basis upon which to allow it to present suchevidence at trial. But even under the single-scheme theory, any marginal relevance that thisevidence 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 evidencewould be best addressed as a trial issue, Dkt. No. 48 at 11, Mr. Bruno now renews his challengeto the admissibility of this stale evidence, for several reasons.

First, these prior alleged acts are irrelevant and unnecessary to prove anything in thegovernment's case. For example, the government has labored to introduce time-barredallegations involving McGinn Smith, an investment banking and brokerage firm that allegedlypaid Mr. Bruno over $630,000 to steer labor unions its way so it could execute the trades ofunion 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 McGinnSmith from 1993 through 2005, and that Mr. Bruno concealed the source of this income inannual financial disclosure filings and failed to properly disclose his job duties for McGinnSmith 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 countsalleged in the indictment. McGinn Smith has not been named as an entity receiving or sendingany of the alleged mailings or wires in the Indictment. Because none of the alleged countsinvolve mailings or wires that were sent to or received from McGinn Smith, there can be noallegation relating to McGinn Smith that makes it "more or less probable" that Mr. Brunoengaged in honest services fraud by failing to adequately report income he received from othercompanies as alleged in counts 1-8 of the Indictment-unless the government wishes to makethe 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 isprohibited 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 dueto 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 criminalpropensity held to be improper). Thus, Mr. Bruno's relationship with McGinn Smith, except forhow McGinn Smith introduced him to Wright, is not relevant to the case and only serves tounfairly inflate the financial magnitude of the alleged scheme.' At trial, the government mustprove beyond a reasonable doubt that Mr. Bruno intentionally committed honest services fraudthrough the use of the mails and wires from 2004 to 2006, the only actionable time period atissue. Events occurring prior to this time are not relevant and constitute unlawful propensityevidence barred under Rule 404(b).

Second, Federal Rule ofEvidence 403 requires exclusion of these prior acts because theyare unduly prejudicial to Mr. Bruno and unfairly magnify the size and scope of the allegedscheme. 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 receivedbefore 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 theindictment. 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 introducingbackground 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 orlimitation may protect both parties' interests when determining whether to admit time-barredevidence).

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at 38. As McGinn Smith was not involved in any of the mailings or wire communications thatform the basis of the charges in the Indictment, payments it allegedly made to Mr. Bruno prior tothe start of the statute oflimitations period have no bearing on this case, and are clearly beingincluded simply to artificially inflate the apparent magnitude of the government's charges againstMr. Bruno. Similarly, the government included in its estimate $477,000 in payments fromLeonard 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 uponpayments 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 ofdollars.

Even if the government were to suggest that such evidence is relevant to showbackground, knowledge, or intent, this is insufficient to overcome the balancing test underFederal Rules ofEvidence 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 unfairprejudice to defendant).

The term "unfair prejudice," as to a criminal defendant, speaks to the capacity ofsome concededly relevant evidence to lure the factfinder into declaring guilt on aground different from proof specific to the offense charged.Old Chiefv. United States, 519 U.S. 172, 180 (1997). Where there is unfair prejudice to thedefendant 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 excludetime-barred evidence because it would "confuse the jury, unfairly prejudice the defendant, andunduly 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 otheracts alleged to have been committed by the defendant. See United States v. Basciano, 2006 WL385325, at *6-7 (B.D.N.Y Feb. 17,2006). Thus, the Court should bar the government fromintroducing any such evidence at trial, as it is unduly prejudicial.

Third, neither mail or wire fraud constitute continuing offenses, so Mr. Bruno should notbe made to defend against such stale charges. While Mr. Bruno recognizes that the statute oflimitations 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 limitationsstatutes is nevertheless important to the admissibility determination. As the Supreme Courtrecognized, the purpose of a statute of limitations is to "protect individuals from having todefend themselves against charges when the basic facts may have become obscured by thepassage 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 . . . mayimpair memories, cause evidence to be lost, deprive the defendant ofwitnesses, and otherwiseinterfere 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 adefendant's right to afair trial would be prejudiced' (emphasis added)); United States v. Rivera-Ventura, 72 F.3d 277, 281 (2d Cir. 1995) (finding statutes oflimitations are "designedprincipally to protect individuals from having to defend themselves against charges supported byfacts that are remote in time."). The Supreme Court cautions that federal courts should bereluctant to subject defendants to criminal prosecution for stale allegations occurring outside theapplicable limitations period, and should do so only in rare circumstances where the allegedcrime 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 explicitlanguage of the substantive criminal statue compels such a conclusion, or the nature of the crimeinvolved is such that Congress must assuredly have intended that it be treated as a continuingone")?

Where, as here, the mail and wire fraud statutes "contemplate]'] an offense that can becompleted 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 withrepeated 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 dismissalupon finding that securities fraud statue did not constitute a continuing offense even wheredefendant 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 thembeing continuous offenses. Thus, by the "explicit language" of these statutes, neither mail norwire 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 allowedto be introduced at trial under a lower standard of proof to support the prosecution of unrelatedactivities falling within the limitations period. The government should not be permitted tobootstrap these stale unrelated allegations to bolster a weak case that amounts to, at most, state or

Indeed, initial review of the Jencks material provided by the government confirms thatmany witnesses in the case simply do not remember facts going back fourteen years-makingthese 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 limitationsgenerally and, as stated above, it is not necessary for the government to prove conduct involving27 unrelated entities when the charges alleged in the Indictment refer to nine specific entities andspecific mailings and wires. The focus of the jury should relate to whether the government hasmet its burden with respect to Counts 1 through 8 and not on what Mr. Bruno's legitimatebusiness activities were over a decade before the charges at issue.

Thus, even if the government retains its single-scheme theory, the prejudicial impactinherent in allowing the government to bootstrap its case through stale accusations warrantsexclusion 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 UnconstitutionalVariance 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 ofits 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 todisclose material information, it has not specified whether, on a count-by-count basis, it arguesthat Mr. Bruno failed to disclose either a conflict of interest or an unlawful gift. Understandingthe government's legal theory behind each count in the Indictment is fundamental to Mr. Bruno'sability to mount an effective defense. Knowing what the government alleges that he failed todisclose and where those disclosures were supposed to be made is also critical to his ability toprepare for trial. Moreover, this request is necessary to assure that Mr. Bruno is not tried onallegations that are different than what the grand jury authorized-yet another unconstitutionalconstructive amendment to and/or variance from the Indictment. See Salmonese, 352 F.3d at620.

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This concern is compounded by the government's most recent disclosures. Although theIndictment 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 nowsuggests that the government may also attempt to present a broader theory based on disclosuresMr. Bruno made or did not make to other authorities, including the press, labor unions, theSecurities & Exchange Commission, and other members in the State legislature. To avoid anyrisk 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 heallegedly was required to reveal and where he was required to make such additional disclosures.

CONCLUSIONBased 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 anUnconstitutional Variance at Trial and order the reliefcontained herein.

Respectfully submitted,sf Abbe David Lowell

Abbe David Lowell, Bar Number 106642Paul M. ThompsonChristopher D. ManMcDermott Will & Emery LLP600 13th Street, NWWashington, DC 20005Phone: 202-756-8001Facsimile: [email protected]

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William J. Dreyer, Esq .Dreyer Boyajian LLP75 Columbia StreetAlbany, NY 12210Phone: 518-463-7784Facsimile: 518-463-4039Attorneys for Defendant Joseph L. Bruno

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UNITED STATES DISTRICT COURTNORTHERNDISTRICTOF NEW YORK------------------------------------------------------- xUNITED STATES OF AMERICA

v.Case No. 09-CR-29 (GLS)

JOSEPH L. BRUNO,Defendant.

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CERTIFICATE OF SERVICEI 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 tothe following:1. Andrew T. Baxter, Esq.

Acting United States AttorneyOffice of the United States Attorney - Albany445 Broadway218 James T. Foley US. CourthouseAlbany, NY 12207-2924

2. Elizabeth C. Coombe, Esq.Assistant US. AttorneyOffice of the United States Attorney - Albany445 Broadway218 James T. Foley US. CourthouseAlbany, NY 12207-2924

3. William C. Pericak, Esq.Assistant US. AttorneyOffice of the United States Attorney - Albany445 Broadway218 James T. Foley US. CourthouseAlbany, NY 12207-2924

IsAbbe David Lowell

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Bruno Motion to Bar Evidence Amend Indictment

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