People v. Ferrara

430 N.E.2d 1275, 54 N.Y.2d 498, 446 N.Y.S.2d 222, 1981 N.Y. LEXIS 3208
CourtNew York Court of Appeals
DecidedDecember 22, 1981
StatusPublished
Cited by27 cases

This text of 430 N.E.2d 1275 (People v. Ferrara) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
People v. Ferrara, 430 N.E.2d 1275, 54 N.Y.2d 498, 446 N.Y.S.2d 222, 1981 N.Y. LEXIS 3208 (N.Y. 1981).

Opinion

OPINION OF THE COURT

Chief Judge Cooke.

This case presents the question whether defendant’s right to counsel was violated when, after defendant retained counsel in connection with his appearances before a Grand Jury investigating fraud in the nursing home industry, the prosecutor arranged to record defendant’s conversations with a nursing home operator during which defendant offered a kickback. In the circumstances of this case, no such violation occurred. The order of the Appellate Division, sustaining the conviction for three counts of perjury in the first degree, should therefore be affirmed.

Defendant and his partner, Ben Solomon, owned Oceanside Institutional Industries, Inc., a laundry and linen supply company they founded in 1974 that serviced a number of Long Island nursing homes and health-related facilities. In early 1976, the office of the Special Prosecutor, appointed to investigate abuses in the operation of nursing homes and related industries, obtained information indicating that defendant had paid kickbacks at least to the owner-operator of the Parkview Nursing Home in an effort to obtain that facility’s business for Oceanside. Defendant was called before a Nassau County Grand Jury on March [503]*50323, 1976, where he appeared without counsel but with a grant of immunity. During relatively brief questioning, defendant denied being a party to any kickback arrangement with Parkview.

In April, 1977, defendant again was subpoenaed to appear before a Grand Jury, shortly before which he retained attorney Morris Cohen to represent him. Cohen informed Special Assistant Attorney-General Richard Miller that he represented defendant and that communications with defendant were to be made through him. At this time, the prosecutor possessed the testimony of Parkview’s administrator that defendant had been paying kickbacks to that home’s operator. Armed with this information, Miller informed both defendant and Cohen prior to questioning that he believed defendant had perjured himself during his first Grand Jury appearance. Again with a grant of immunity, defendant responded to the prosecutor’s more extensive questioning with denials of kickback payments to any nursing home or any knowledge about the practice.

In June, 1977, the prosecutor learned that General Diaper Service, Inc., defendant’s former employer, regularly paid kickbacks to obtain or retain nursing home customers for its linen supply business. The information about General Diaper also indicated that defendant, responsible for the company’s day-to-day operations, would know which homes had been parties to a kickback scheme. At this point, the prosecutor possessed sufficient evidence to support an indictment against defendant for perjury during his second Grand Jury appearance.

During this same period, Alex Sreter, the operator of two nursing homes, contacted the Attorney-General’s office in the hope of obtaining a favorable disposition of criminal charges he was aware were about to be brought against him and his mother arising out of their operation of the nursing homes. Sreter provided information about corrupt practices in the health care industry and eventually entered into a written plea agreement under which he agreed to co-operate further and to make restitution for money wrongfully obtained from the Medicaid program in exchange for a plea of guilty to income tax evasion, a misde[504]*504meaner, in satisfaction of the grand larceny charges that were to be brought and a report to the court of his cooperation.

Sreter became a key figure in this case when he informed the prosecutor that defendant’s company, Oceanside, had been servicing Nassau Nursing Home for the nine months prior to Sreter’s decision to co-operate. Sreter had neither demanded nor received kickbacks from Oceanside, but had heard that defendant’s partner, Solomon, made such arrangements with others. Shortly after Sreter’s offer to cooperate, Solomon called him to discuss the possibility of Oceanside servicing Sreter’s other home, the Van Doren Nursing Home. They agreed to meet on July 11, 1977. Sreter reported the upcoming meeting to the prosecutor’s office and consented to be equipped with a recording device for this and subsequent meetings.

Defendant accompanied Solomon to the July 11 meeting at which both sought to obtain the Van Doren business. Offers from competitors were discussed in general terms. Defendant and Solomon offered low prices as an inducement to Sreter, who responded that price was not everything in the other offers received. The parties agreed to continue the discussion in the future.

During subsequent meetings between defendant and Sreter only, which also were recorded, defendant offered cash kickbacks for the Van Doren account and explained his method of arranging the payments. In an attempt to overcome Sreter’s apparent reluctance to accept such an arrangement because of the extensive State investigations, defendant assured Sreter that the illicit transaction would not be revealed to prosecutors, that defendant had had similar deals with only a small number of other operators, and that such deals would continue to be part of the health care industry despite law enforcement efforts. Defendant made clear that he was very careful, would never get caught and would never reveal the other parties to an arrangement. Sreter finally refused the kickback offer and declined to give Oceanside the Van Doren business. He also terminated the Nassau account. The last conversation took place on October 13, 1977.

[505]*505Meanwhile, the prosecutor had decided not to indict defendant for perjury for his April, 1977 testimony before the Grand Jury, but to give him an opportunity to testify truthfully and aid the investigation of industry abuses. To that end, defendant was subpoenaed to appear before a third Grand Jury, which he did on October 17, 1977. Defendant was not advised that his conversations with Sreter had been recorded. Again informed of the nature of the Grand Jury inquiry and with a grant of immunity, defendant was asked numerous questions concerning kickback deals in the industry involving Oceanside and General Diaper and whether he had ever offered or discussed kickback arrangements with named individuals, including Sreter. Once again, defendant denied personally knowing of any such deals in the industry or ever having offered a kickback.

Based on his responses, defendant was indicted on four counts of perjury. Counts one, two and four related to questions based upon the recorded Sreter conversations; count three related to defendant’s testimony concerning the kickback practices of his former employer, General Diaper. Defendant unsuccessfully moved before trial for dismissal of the indictment and suppression of the Sreter conversations, among other things. After a jury trial, defendant was acquitted of count three but found guilty on the other counts. Following affirmance of his conviction by the Appellate Division, defendant was granted leave to appeal to this court.

Defendant raises numerous arguments in support of reversal. Of primary note is defendant’s broad assertion that the Sreter tapes should have been suppressed because the prosecutor violated his right to counsel by arranging to record the conversations. The question, however, may be better framed as whether retention of counsel in connection with a Grand Jury inquiry precludes investigative techniques that elicit in a noncustodial setting not a confession, but a plan to commit a new crime of the type then under scrutiny.

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Cite This Page — Counsel Stack

Bluebook (online)
430 N.E.2d 1275, 54 N.Y.2d 498, 446 N.Y.S.2d 222, 1981 N.Y. LEXIS 3208, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-v-ferrara-ny-1981.