08/05/2009 47 RESPONSE to Motion by USA as to Joseph Mangiapane, Jr. re 39 MOTION For An Order Permitting Defendant To Inspect The Minutes Of The Grand Jury That Returned The Instant Indictment, 41 MOTION For A Pretrial Conference Pursuant To Federal Rules Of Civil Procedure 17.1, 35 MOTION for Disclosure, 38 MOTION to Produce, 37 MOTION For Jenck's Act Materials In Advance Of Trial, 42 MOTION For Bill Of Particulars, 43 MOTION For Production Of Evidence Favorable To The Accused, Production Of Evidence Bearing On Credibility Of Plaintiff's Witnesses And For Disclosure Of Impeaching Information, Production Of Evidence Integral To Making A Defense And For Constituti, 36 MOTION For A List Of Witnesses The Plaintiff Does Not Intend To Call At Trial (Rosen, Keith) (Entered: 08/05/2009)
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GOVERNMENT'S OMNIBUS RESPONSE TO DEFENDANT MANGIAPANE'S PRE-TRIAL MOTIONS
COMES NOW the United States of America, by and through David C. Weiss, Acting United States Attorney for the District of Delaware and Keith M. Rosen and Shannon T. Hanson, Assistant United States Attorneys, and respectfully submits this omnibus response to the pre-trial motions filed by the defendant, raising the following claims:
1) Motion for Disclosure of Informants (D.I. 35);
2) Motion for List of Witnesses the Plaintiff Does Not Intend to Call at Trial (D.I.36);
3) Motion for Jencks Act Materials in Advance of Trial (D.I. 37);
4) Motion for Production of Grand Jury Testimony (D.I. 38);
5) Motion to Inspect the Minutes of the Grand Jury (D.I. 39);
6) Motion for a Pretrial Conference (D.1. 41);
7) ) Motion for a Bill of Particulars (D.I. 42);
8) Motion for Production of Evidence Favorable to the Accused (D.I. 43).
The defendant has also filed a companion Motion for Leave to File Motions to Compel Discovery (D.I. 40), seeking the Court's permission to file the aforementioned motions. The government does not oppose this application. It is notable, however, that this Court's Local Rule 5(d)(2) requires that the movant confer with the opposing party before filing discovery motions. The defendant did not confer with the government concerning the substance of these motions prior to filing.
At all events, for the reasons set forth below, this Court should find that all of the defendant's substantive motions should be denied either as without merit or moot. Each motion will be addressed in turn.
I. FACTUAL ALLEGATIONS
A. The Second Superseding Indictment
The defendant, along with co-defendants Dynkowski and Riviello, is named in a nine- count Second Superseding Indictment [hereinafter "the indictment"].[1] The defendant is specifically charged with conspiracy to commit securities fraud (Counts 1 & 6), securities fraud (Count 7), wire fraud (Count 8), conspiracy to commit money laundering (Counts 4 & 9), and money laundering (Count 5). The defendant has represented in the instant motions that he intends to proceed pro se in this matter.
[1]A number of related indictments are also pending before this Court: United States v. Pawel Dynkowski & Gerard D'Amaro, No. 09-54-JJF; United States v. Matthew Brown, No. 09- 46-JJF; United States v. Jacob Canceli, No. 09-47-JJF; and United States v. Angelo R. Panetta, No. 09-07-JJF. A related civil complaint filed by the SEC (Securities and Exchange Commission v. Dynkowski et al., Civil Action No. 09-361-GMS) is also pending.
In summary, the indictment alleges that in 2006-07, Mangiapane and his co-defendants conspired to commit fraud with respect to the purchase and sale of securities in two, different over-the-counter stocks: GH3 International, Inc. (ticker: GHTI), and Asia Global Holdings Corp. (ticker: AAGH). The type of fraud scheme at issue is a form of stock market manipulation known colloquially as a "pump and dump." The government expects to prove at trial that the defendants and their co-conspirators obtained large blocks of shares in these companies, which were lodged in nominee accounts that they controlled. The conspirators then "pumped" the market for the stocks using various fraudulent means, creating artificial volume and price increases. Upon doing so, the conspirators then "dumped" the shares that they controlled.
With respect to GH3, the indictment alleges that the conspirators sought to artificially inflate market demand for GH3 shares by manipulating the sales of GH3 stock in a way that appeared to be the product of free and fair market forces. Second Superseding Indictment at ¶7. They did so in various ways, including: (a) by causing to be issued 312 million unregistered, free- trading, shares through the misuse of SEC Rule 504 of Regulation D; (b) by coordinating and timing trading activity to create the false impression of liquidity in GH3; (c) by engaging in manipulative securities transactions, such as wash sales and matched orders, to artificially increase the demand for GH3 shares; and (d) by engaging in a campaign to post on-line messages about GH3, including the use of fraudulent and misleading press releases. Id. at ¶1[7-8. The indictment alleges eighteen (18) overt acts committed in furtherance of this conspiracy. Id. at ¶8. The indictment further alleges that Mangiapane and his co-defendants dumped GH3 shares in the course of the scheme to defraud, and laundered the proceeds through a Bank of America account in the name of Westmark Capital Group, Inc. Id. at pp 15-16. According to the indictment, approximately $220,000 in fraudulent proceeds were delivered by defendant Riviello to defendant Mangiapane in January 2007. Id. at ¶16(g).
The indictment alleges that the defendant and his co-conspirators engaged in similar fraudulent acts with respect to the scheme to liquidate shares of AAGH. Id. at ¶19 et seq. Twenty-one overt acts are alleged in furtherance of this conspiracy. Id. at ¶23. Included in these overt acts is the allegation that defendants Dynkowski and Mangiapane directed the buying and selling of the AAGH shares in furtherance of the scheme. Id. at ¶23(g), (t), (q). The indictment further alleges that the proceeds from the sale of the AAGH shares were routed through defendant Mangiapane, and that defendants Dynkowski and Mangiapane traveled to Costa Rica in October 2006 for the purpose of establishing an off-shore bank account to hide Dynkowski's fraud proceeds. Id. at 1[31(e), (g).
B. Discovery
Consistent with its long-standing policy, the government expects to provide discovery in excess of its obligations under Rule 16, Brady, and the Jencks Act. As a result, the document production in this case will be substantial, and is presently ongoing. The government has already produced to other defendants in this, and related cases, six (6) DVDs containing tens of thousands of pages of documents, and expects to produce in excess of 20,000 additional pages shortly. These totals do not include Jencks materials, which will be provided closer to trial. See Section II.C., infra.
On or about July 23, 2009, the instant motions were entered on the docket. Those motions asserted the defendant's intention to proceed pro se in this matter. Prior to that time, the government was not aware whether the defendant had counsel and, accordingly, did not produce discovery materials to him directly. The government expects to begin the discovery process with the defendant once the parties have agreed to an appropriate proposed Protective Order governing certain discovery materials.
II. ARGUMENT
A. The Defendant's Motion for Disclosure of Informants Should Be Denied
The defendant's motion (D.I. 35) seeks an order directing the government to disclose any informants "who have or may have information that would be material to the case at bar." Motion at 1. The defendant's motion does not assert any reason to believe that any such informants actually exist; he instead relies upon allegations in the indictment to "persons known . . . to the Grand Jury." See id. at 2. For the reasons set forth below, this motion should be denied.
As an initial matter, it is important to note that the indictment makes no mention of confidential informants in this case. The fact that third-parties are referred in the indictment by pseudonyms has no relevance to whether such persons are or are not confidential informants. As the Court is aware, it is common practice for the government not to refer to unindicted third- parties by name in an indictment.[2]
[2]The government, by this response, neither confirms nor denies that it has utilized any confidential informants during the course of its investigation.
To the extent that any informants were utilized, the law on disclosure of their identities in this district is well-settled. The standard for determining when a defendant's request for confidential informant information should be granted was outlined in Rovario v. United States, 353 U.S. 53 (1957). Rovario held that courts should balance the public interest in encouraging and protecting informants with a defendant's need for informant identity information in order to ensure a fair determination of a cause. See 353 U.S. at 59-61. The Court left to the district courts on a case-by-case basis the task of weighing the public interest in protecting the flow of information against the individual's right to prepare his defense. Id. at 59, 62. See also United States v. Brown, 3 F.3d 673, 679 (3d Cir. 1993) (explaining Rovario analysis). The burden is on the defendant to show the need for disclosure. See United States v. Jiles, 658 F.2d 194, 197 (3d Cir. 1981).
A defendant seeking to overcome the privilege must demonstrate initially that the disclosure "is relevant and helpful to [his] defense" or "is essential to a fair determination" of his guilt. United States v. Brown, 3 F.3d 673, 679 (3d Cir. 1993) (quoting Roviaro, 353 U.S. at 60-61). "[Mere speculation as to the usefulness of the informant's testimony to the defendant is insufficient to justify disclosure of his identity." United States v. Bazzano, 712 F.2d 826, 839 (3d Cir. 1983). See also United States v. Day, 384 F.2d 464, 469 (3d Cir. 1967) ("if disclosure on a mere supposition is required in every instance the interests of law enforcement in combating [crime] will be detrimentally affected by the emasculation of its only effective weapon -- the informer.") (McLaughlin J., concurring).
The leading cases on the production of confidential informant information in this District are United States v. Grant, 256 F. Supp. 2d 236, 243 (D. Del. 2003) (Farnan, J.), and United States v. Beckett, 889 F. Supp. 152 (D. Del. 1995) (Robinson, J.). In both cases, this Court held that the identity of an informant who was an active participant in the charged offenses need not be disclosed until one week before trial if the government indicates its intention to call the informant as a witness at trial and if the government provides the defendant with the necessary impeachment information at that time. See Grant, 256 F. Supp. 2d at 243-44k Beckett, 889 F. Supp. at 155. That information includes:
a. The number of cases in which the informant has been involved with law enforcement, the role played by the informant in each, and the results of those cases;
b. A list of the informant's prior convictions;
c. Information concerning the informant's prior arrests which relates to impeachment material;
d. Information concerning misconduct of the informant reflecting on his/her candor, truthfulness, or law abiding character;
e. Copies of writings, if any, between the government and the informant to the extent that they pertain to "agreements" between the government and the informant;
f. Any information, agent's reports, or other writings regarding promises of immunity, leniency, preferential treatment, or other inducements made to the confidential informants or to any other family member, friend, or associate of the informant, in exchange for the informant's cooperation, including the dismissal or reduction or charges, assisting in matters of sentencing or deportations, or promises or expectancies regarding payments for expenses or testimony or eligibility for award or reward;
g. Information concerning monies paid to the informant by the DEA;
h. Any other materials required by the Jencks Act, 18 U.S.C. § 3500. 889 F. Supp. at 155-56; Grant, 256 F. Supp. 2d at 244. As noted above, these materials need not be produced until one week before trial. See Grant, 256 F. Supp. 2d at 244.
To the extent that the government intends to call an active participant confidential informant as a witness at trial, it will provide the information required by Grant and Beckett no later than one week prior to trial. Pursuant to Grant and Beckett, the defendant's motion should be denied to the extent that it seeks materials beyond those listed above and/or requests these materials at an earlier time. See Grant, 256 F. Supp. 2d at 244; Beckett, 889 F. Supp. at 155-56.
The defendant's motion seeks the disclosure of the identity of not only active participant informants, but the identity of "any informants who were in a position to have knowledge of the antecedents to the government's investigation." Motion at 2. To the extent that the defendant seeks the identity of mere tipsters -- or informants who were less than active participants in the offense conduct -- his motion contains only speculation as to the need for disclosure, and thus lacks the support necessary to meet his burden under Roviaro. See Bazzano, 712 F.2d at 839; United States v. Marshall, 471 F. Supp. 2d 479, 484 (D. Del. 2007) (Robinson, J.) (holding that mere speculation that disclosure will be helpful to the defense will not defeat government's interest in protecting identity of informants). Simply repeating the Roviaro test is not enough. Beckett, 889 F. Supp. at 155. Accordingly, the defendant's motion should be denied.
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Doc 47 OCR extract - part 1
Market Data 
Markets 
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