People v DePalo

[*1] People v DePalo 2018 NY Slip Op 50299(U) Decided on March 8, 2018 Supreme Court, New York County Dwyer, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 8, 2018
Supreme Court, New York County

The People of the State of New York, Plaintiff,

against

Robert DePalo et al., Defendants.



1450-2015



For the People:

Jose A. Fanjul

Assistant District Attorney

New York County

One Hogan Place

New York, NY 10013

(212)335-9000

Brian Kudon

Assistant District Attorney

New York County

One Hogan Place

New York, NY 10013

(212)335-9000

For Defendants:

Peter R. Ginsberg, Esq.

Peter R. Ginsberg Law, LLC

80 Pine Street, 33rd Floor

New York, NY 10005

(646) 374-0029

Avraham C. Moskowitz, Esq.

Moskowitz & Book, LLP

345 Seventh Avenue, 21st Floor

New York, NY 10001

(212) 221-7999

Joseph A. Grob

Joseph A. Grob, P.C.

345 Seventh Avenue, 21st Floor

New York, NY 11559

(516) 993-7336
Mark Dwyer, J.

Defendants were indicted on May 20, 2015, for Grand Larceny in the 1st Degree and related offenses. On December 8, 2017, this court orally denied defendants' motion for the issuance of commissions to depose witnesses in Britain. Defendants have since moved to reargue the order of December 8th. That motion was denied orally on December 18, 2017. Given the repetitive and somewhat confusing nature of the defense motions in the case, which go beyond the two motions just indicated, an explanation of this court's decisions is appropriate.

I

The indictment charges in pertinent part that defendant DePalo stole millions of dollars from individuals who invested in a company called ArgentUK. On June 16, 2016, defendants moved for the issuance of Letters Rogatory.In essence, they asked that this court request an order from a court in the United Kingdom. The order would require that 27 witnesses in that country be interrogated, and the British court would supervise the process. The defense hoped thereby to obtain evidence that could be admitted at defendants' trial. That motion denied was denied (Zweibel, J.) on August 15, 2016.

Defendants appealed Justice Zweibel's order to the Appellate Division, First Department. That Court dismissed the appeal on February 23, 2017. In a nutshell, the Court ruled that no appeal could be taken from an order entered during the course of a criminal case. People v. DePalo, 147 AD3d 633 (1st Dept 2017).

After Justice Zweibel moved to a different part, the case was reassigned to this judge. On March 17, 2017, defendants moved to reargue Justice Zweibel's ruling. This court denied that reargument motion on May 5, 2017.

Defendants next moved on June 7, 2017, not for the issuance of Letters Rogatory, but instead for the issuance of commissions. Defendants now sought permission to depose the same 27 witnesses in Great Britain without compulsory process from or supervision by a British court. This court denied that motion on December 8, 2017. Defendants sought reargument on December 11, 2017. The motion was denied orally on December 18, 2017. This opinion explains the rulings of December 8 and 18, 2017.

II

The court begins with a few words about Letters Rogatory and commissions. Letters Rogatory are requests from the court hearing a case for assistance from a court in another jurisdiction. Such letters ask the foreign court to compel a witness within that court's jurisdiction to attend a deposition at which the witness must answer interrogatories. If the foreign court grants the request, it supervises the questioning under the rules of procedure and evidence which it deems proper. The witness's answers are then admissible at trial. For obvious reasons, courts will make a request for Letters [*2]Rogatory only if witnesses in the foreign jurisdiction are unable or unwilling to appear at trial.

In New York, Letters Rogatory are provided for only in the CPLR. No mention is made of then in the CPL. In this case Justice Zweibel denied defendants' request for Letters Rogatory in part on a finding that they are not available in a criminal case. That conclusion of course follows naturally from the fact that American procedural and evidentiary rules need not be applied by the foreign court. If that is not problematic in civil cases, it certainly is in criminal cases.

The issuance of commissions, on the other hand, is provided for in Article 680 of the CPL. Commissions, like Letters Rogatory, seek sworn information from witnesses in a foreign jurisdiction. However, the foreign courts are not involved; American law applies to the questioning. Nor is there any mandatory process obliging the witnesses to appear. Witnesses are simply asked to appear voluntarily at a specified location and to answer questions. If a witness does not appear, that ends the process. If a witness attends, answers are recorded and are admissible at trial. Notably, the decision whether to issue commissions is entrusted to the discretion of the New York trial court.

In this case, the defense initially sought Letters Rogatory, in part on an assertion that the witnesses would not appear to be questioned unless served with British process compelling them to appear. Thereafter, the defendants sought the issuance of commissions because "at least a few of the witnesses" now "seemingly are willing to appear voluntarily to testify in the United Kingdom." The defense motion was denied, as was the motion to reargue.

III

A

The reasons for denial of the application for issuance of commissions to most of the 27 witnesses can be addressed in conclusory fashion. The People assert that defendants stole millions of dollars from investors through a fraudulent stock offering. Defendants seek to depose 22 investors. Throughout these proceedings defendants have claimed that these witnesses have material evidence. Defendants say that the 22 investors, or at least the ones that defendants have heard from, will testify that they were not misled by defendant DePalo personally. Further, some witnesses will testify that they received or might have received a prospectus warning that any investment in ArjentUK might be risky.

Unfortunately for defendants, neither point is material. The People do not assert that defendant DePalo personally spoke to investors. Nor do the People deny that investors were warned that, as a general matter, risks are involved in an investment. There are other apparent deficiencies that attend defendants' application for commissions as to these 22 witnesses. But the simple and conclusive response as to them is that [*3]defendants have not shown that they possess information material to the case.

Defendants also request commissions as to two accountants. Those men audited the books of ArjentUK. According to defendants, these accountants have refused to come to New York to testify. Even assuming that for some reason the auditors do actually refuse to come to New York, that the auditors will voluntarily appear in London, and that the auditors have material information, there is no reason why a New York accountant cannot examine the books as well, and testify in their place.

B

Defendants seek as well to examine Tanya Gladtke, the estranged wife of Joshua Gladtke, and Nazy Cook, who is Ms. Gladtke's mother. Defendants believe that Mr. Gladtke will testify for the People. Defendants state without detail that they expect the two women to offer evidence that Gladtke stole and borrowed large amounts of money from defendant DePalo. Defendants would argue that his debt provides him a motive to falsify his testimony.

The reasoning for that conclusion is not entirely clear, but the court will pass that by for now. This much is certainly true: evidence that a witness has a motive to lie must be considered material. But that these two witnesses would be asked about a material issue does not without more entitle defendants to the issuance of commissions.

In the first place, in their numerous and lengthy submissions both as to Letters Rogatory and to commissions, defendants have never offered particulars about what they believe the two women would say, and the women's basis for saying it. For example, we do not know the basis of the women's purported knowledge about Mr. Gladtke's financial transactions. We do not know whether Ms. Gladtke would allege that she had privileged conversations with her husband and, if so, whether he would waive the privilege. We do not know whether Ms. Cook would be asked to relate hearsay accounts provided by her daughter. Despite numerous demands for detail, defendants simply say that the witnesses will testify about Gladtke's participation in fraudulent activity as to ArjentUK; his thefts from DePalo and other debts to DePalo; and a resultant "motive to provide false testimony." This court does not believe that these vague assertions justify the burdensome remedy defendants seek, and the additional delay that remedy would require in this aging prosecution.

Even more fundamentally, if commissions were issued, they could not be implemented with compulsory process. Rather, a commission is, as noted, a request that a witness appear voluntarily for a deposition. Should defendants be granted commissions as to Ms. Gladtke and Ms. Cook, the defendants, their attorneys, and the People's attorneys could appear in a London venue and find themselves with no one to question.Relevant in that regard are the statements submitted by defendants in their earlier motion papers. For example, in a memorandum submitted on March 17, 2017, in support [*4]of the reargument motion as to Letters Rogatory, at page 16, defense counsel stated:

[Justice Zweibel's] suggestion that, because several of the witnesses are uncooperative, there is no reason to suppose that they would appear in the United Kingdom for depositions reflects a fundamental misunderstanding of the process. Letters Rogatory are the only means by which these witnesses can be compelled to appear and give evidence.

Similarly, in paragraph 14 of an affirmation submitted as Exhibit B to the motion of March 17, 2017, defense counsel echoed: [T]he Issuance of a letter rogatory is the only available procedure for obtaining the witnesses' testimony....

In the same mode but emphasized, in the memorandum of law of March 17, 2017, at pages 20-21, defendants averred:

Commissions cannot compel a foreign witness to testify. For commissions to be practical, a witness must be willing to appear voluntarily.

* * * None of the witnesses whose testimony is sought have committed to voluntarily appear and testify for defendants.... Defendants have established that issuing commissions in this case "would be an empty ceremony and wholly meaningless...."It follows then that these witnesses must be compelled to appear and give evidence by Letters Rogatory, which is the only method by which these unavailable witnesses can be compelled to testify.

* * * In sum, absent the requested Letters Rogatory, defendants will be unable to obtain the material, relevant and exculpatory evidence from the numerous foreign witnesses identified.

In a footnote on page 21 defendants added:

Because the witnesses will not voluntarily give testimony or cooperate with the defense,it also follows that these witnesses will not voluntarily appear and testify through a livevideo transmission. Letters Rogatory are the only method by which these witnesses can be compelled to give the evidence needed for Defendants' defense.

Now that Letters Rogatory have been denied, defendants assert that they have re-considered their position. And they now change their tack. They say that an unidentified "some" of their 27 witnesses have "seemingly" indicated that they will voluntarily appear to testify at a deposition in the United Kingdom. Defendants have given this court no reason to think so, as to Ms. Gladtke and Ms. Cook in particular.

This court is faced with only vague information about whether Ms. Gladtke and Ms. Cook have admissible testimony to give. This court is faced with only speculation [*5]that the witnesses would appear for depositions—speculation that is contradicted by defendants' own

vociferous prior representations. The court will not order that the trial be further delayed, and the People put to seemingly meaningless expense, based on defendants' showing.

C

One witness remains. Philip Parsons became President of ArgentUK only after defendant DePalo's alleged stock fraud had occurred. Defendants insist that Parsons is the only person in the world who can explain the books of ArgentUK, and testify that no company funds sent to defendant DePalo after Parsons took office were the fruits of corruption. According to defendants, Parsons was unwilling to testify in New York because he has taken a new position, and has been professionally embarrassed by publicity about his connection to the ArgentUK scandal. But, defendants assert, he will quite willingly appear at a deposition in London.

Two responses, by now familiar, bear weight. First, defendants offer no reason to believe that Parsons will appear at a London deposition. As with the other 26 witnesses, there is no affirmation stating that Parsons will appear. There is no statement by defense counsel that Parson has told them he will appear. We have only the statement that some witnesses—with no one, including Parsons, specifically said to be among them—have "seemingly" indicated that they are willing to be deposed in London.

Second, we once again have no clue about what specifics Parsons could offer, much less why he is the only person in the world who could offer them. Defendants assert that ArgentUK's bank records are frozen by regulators. But Argent UK has been financed by investors who provided it with many millions of dollars. This court does not credit that Parsons is the only employee who can testify about the company's dealings with defendants before and after Parsons become President. Indeed, it is unclear why DePalo's records and his American associates could not explain them.

Defendants have provided nothing but unexplained assertions to that end. Defendants have not, for example identified a particular transaction with defendant DePalo as to which Parsons has information that is based on unavailable records of ArgentUK. Nor have defendants indicated what information Parsons has about anything that happened after he became the ArgentUK President. If this showing sufficed, any defendant whose case had an international angle could stall his trial indefinitely.

* * *

Defendants' showing of need for commissions under CPL Article 680 is inadequate. Their renewed motion for commissions has therefore been denied.

E N T E R:

_____________________________

MARK DWYER

Justice of the Supreme Court