United States v. Allen

160 F. Supp. 3d 684, 2016 U.S. Dist. LEXIS 17069, 2016 WL 555949
CourtDistrict Court, S.D. New York
DecidedFebruary 11, 2016
DocketS1 14 Cr. 272
StatusPublished
Cited by1 cases

This text of 160 F. Supp. 3d 684 (United States v. Allen) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Allen, 160 F. Supp. 3d 684, 2016 U.S. Dist. LEXIS 17069, 2016 WL 555949 (S.D.N.Y. 2016).

Opinion

OPINION AND ORDER

JED S. RAKOFF, United States District Judge

On October 16, 2014, defendants Anthony Allen and Anthony Conti were charged in a Superseding Indictment with conspiracy to commit wire fraud and bank fraud, as well as several substantive counts of wire fraud. See Superseding Indictment, Dkt. 24. On July 17, 2015, defendants moved, pursuant to Kastigar v. United States, 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972), to dismiss the Superseding Indictment or, in the alternative, to suppress the testimony of Government cooperator Paul Robson and “all evidence derived from Mr. Robson’s testimony.” See Memorandum of Law in Support of Defendants’ Motion to Dismiss the Superseding Indictment on Kastigar Grounds (“Defs.Br.”), Dkt. 76, at l.1 Defendants claimed, in a nutshell, that the testimony they were compelled to give to the United Kingdom’s Financial Conduct Authority tainted the U.S. Government’s case against them, particularly as a result of the review of this testimony by Mr. Robson, who subsequently cooperated with the Government and testified at the defendants’ trial. The Government, according to defendants, had the “affirmative duty” to prove, pursuant to Kastigar v. United States, that “the evidence it proposes to use is derived from a legitimate source wholly independent of the compelled testimony.” Because the Government allegedly could not meet that burden, the Court, according to defendants, had to dismiss the indictment or suppress Mr. Robson’s testimony and evidence derived from that “testimony.”2 See Defs. Br. at 9-10, 17; Kastigar, 406 U.S. 441 at 460, 92 S.Ct. 1653.

On September 7, 2015, following the initial briefing and oral argument on defendants’ Kastigar motion, the Court determined that an evidentiary hearing (a “Kastigar hearing”) would need to be held in order for the Court to definitively resolve the motion. See Order dated Sept. 7, 2015, Dkt. 111. By order dated September 10, 2015, the Court further determined that, in accordance with prevailing practice in the Second Circuit, the Kastigar hearing (if still relevant) would take place following the conclusion of the defendants’ trial. See Order dated Sept. 10, 2015, Dkt. 112; see also United States v. Volpe, 42 F.Supp.2d 204, 219 (E.D.N.Y.1999) (“While the court has discretion to hold the [Kastigar] hearing before, during, or after the trial ... it is the general practice in this circuit to defer such a hearing until after trial.”). On November 5, 2015, following a three-week jury trial, a jury found defendants Allen and Conti guilty on all counts. See Verdict, Dkt. 147. (General familiarity with the trial proceedings is here presumed.)

[688]*688On December 16 and 17, 2015, the Court held a Kastigar hearing at which the Government sought to show that its evidence was derived from legitimate sources wholly independent of defendants’ compelled testimony.3 At the hearing, the Court heard testimony from Mr. Robson and FBI Agent Jeffrey Weeks. In addition, the Court, on consent, received in evidence various declarations and other written evidence previously submitted in connection with the Kastigar motion.

Following the Kastigar hearing, the Court received still further briefing and submissions on the Kastigar motion. See Government’s Post-“Kastigar ” Hearing Brief (“Gov’t Post-Hearing Br.”), Dkt. 208; Defendants’ Supplemental Memorandum of Law in Further Support of Their Motion to Dismiss the Superseding Indictment on Kastigar Grounds (“Defs. Post-Hearing Br.”), Dkt. 209; Government’s Response to Defendants’ Supplemental Memorandum in Support of Their Motion to Dismiss on Kastigar Grounds, Dkt. 211; Defendants’ Memorandum of Law in Opposition to the Government’s Post-“Kastigar” Hearing Brief (“Defs. Opp. Post-Hearing Br.”), Dkt. 212.

Having now carefully reviewed this mass of materials, and having assessed the demeanor and credibility of the witnesses at the Kastigar hearing (as well as, to the extent here relevant, the witnesses at the trial), the Court makes the following findings of fact and conclusions of law:

In 2012, the United Kingdom’s Financial Conduct Authority (“FCA”)4 began an investigation into potential manipulation of the London Interbank Offered Rate (“LI-BOR”) at the Dutch bank Cooperatieve Céntrale Raiffeisen-Borenleenbank B.A. (“Rabobank”). See Defs. Br. at 1. As part of this investigation, the FCA interviewed defendant Allen on June 20 and 21, 2013, and defendant Conti on January 25, 2013. See GX 201 (Letter from Department of Justice (“DOJ”) to Defense Counsel dated May 26, 2015), Dkt. 95-6.5 Mr. Allen had served as Rabobank’s Head of Liquidity and Finance at Rabobank from 2005 through approximately the end of 2008. See Defs. Br. at 3; Superseding Indictment dated June 25, 2015, Dkt. 62, ¶ 23. Mr. Conti was a cash trader at Rabobank and the primary U.S. dollar LIBOR submitter at that bank until about April 2009. See Defs. Br. at 4; Superseding Indictment ¶ 26. The FCA’s interviews of defendants Allen and Conti were conducted on a “compelled” basis, in the sense that failure to respond could result, under UK law, in criminal penalties, including imprisonment. See UK Financial Services and Markets Act of 2000, Part XI, at § 177, Dkt. 76-7. On January 17, 2013, the FCA conducted a compelled interview of Paul Robson, another former Rabobank trader who served as Rabobank’s primary submitter of Yen LIBOR until at least November 2008. See Defs. Post-Hearing Br. at 3; DX608B, Dkt.' 210-5; Indictment dated Apr. 28, 2014, Dkt. 5, ¶ 17.

[689]*689In November 2013, the FCA sent Mr. Robson’s UK counsel, Steven Francis, a warning notice informing him that the FCA intended to take further action against Mr. Robson. See DX 608S (“Robson Declaration”), Dkt. 202-3, ¶ 4; Memorandum in Opposition to Defendants’ Motion to Dismiss Based on Kastigar (“Gov’t Opp. Br.”), Dkt. 95, at 6. Accompanying the warning notice, pursuant to UK law, were transcripts of' interviews the FCA had conducted with individuals allegedly related to the LIBOR investigation, including defendants Allen and Conti. See Robson Declaration SI 4; UK Financial Services and Markets Act XXVI § 394(1), Dkt. 76-7.

Mr. Robson reviewed the FCA transcripts in November or December 2013. See Robson Declaration SI 5.6 Mr. Robson testified at the Kastigar hearing that his UK counsel “instructed [him] to have a read through, highlight anything that was relevant or [he] had any questions about, and then let [his UK counsel] know when [he was] done.” Transcript of Kastigar Hearing (“Tr.”) at 5:24-6:2. Mr. Robson duly reviewed the transcripts over the course of two afternoons, see Tr. at 6:3-12, and underlined or circled certain passages in the transcripts, including parts of the transcripts of defendants’ testimony. See Tr. 77:11-79:8. (At the direction of the Court, these marked-up transcripts were subsequently furnished to defendants’ counsel.) In addition, Mr. Robson wrote some pages of independent notes. See Tr. at 79:2-7.

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Related

United States v. Allen
864 F.3d 63 (Second Circuit, 2017)

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Bluebook (online)
160 F. Supp. 3d 684, 2016 U.S. Dist. LEXIS 17069, 2016 WL 555949, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-allen-nysd-2016.