IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN UNITED STATES OF AMERICA, Plaintiff, vs.

JAMES A. STUART, JR., Defendant. ) ) ) ) ) ) ) ) ) )

Case No. 10-CR-288

MOTION TO COMPEL DISCLOSURE OF ALL INFORMANTS AND GOVERNMENT COOPERATORS COMES NOW Defendant James A. Stuart (hereinafter Stuart), by and through his undersigned attorneys of record, the Bernhoft Law Firm, S.C., specifically Attorney Robert G. Bernhoft, and respectfully requests, pursuant to the dictates of Brady v. Maryland, 373 U.S. 83 (1963), Giglio v. United States, 405 U.S. 150 (1972), Kyles v. Whitley, 115 S.Ct. 1555 (1995), and Fed. R. Crim. P. 16, for entry of an order requiring the government to disclose and provide the following specific information and material known or through the exercise of due diligence should be known to the government concerning informants and cooperating government witnesses. The information sought is favorable to Stuart on the issues of guilt or punishment, including impeachment information and other material and evidence tending to discredit the prosecutions witnesses. A discovery demand letter requested these items on March 16, 2011, but the parties have been unable to resolve these issues prior to the deadline for this motion. (See Exhibit A attached). After reviewing the documents provided to defense counsel to date, it is apparent and manifest that substantial and critical information is missing from the discovery, including exculpatory and impeachment material in favor of the defendant. Additionally, an employee of 1
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Stuarts company, New Age Chemical, and sister of the defendant, Beverly Schlipp, provided a lengthy statement to IRS Special Agents Matthew Rech and Park Jones on February 19, 2009, the same day the search warrant had been executed at New Age Chemical. As the Special Agents memorialized in the February 19, 2009 MOI, they formally reintroduced themselves to Ms. Schilpp before taking her statement. However, the February 19, 2009 MOI is the first recorded IRS contact with Ms. Schlipp, according to the discovery provided thus far, and it is likely there were prior contacts with Ms. Schlipp before February 19, 2009. A. THE DUTY TO DISCLOSE Due process compels the disclosure of evidence material either to the guilt or punishment of the defendant. See Brady v. Maryland, 373 U.S. 83, 87 (1963). This requires the government disclose any evidence that could play a role in uncovering admissible evidence, aiding witness preparation, corroborating testimony, or assisting impeachment or rebuttal. See United States v. Bagley, 473 U.S. 667 (1985); see also Unites States v. Lloyd, 992 F.2d, 348, 351 (D.C.Cir. 1993). Taken together, this group of constitutional privileges delivers exculpatory evidence into the hand of the accused, thereby protecting the innocent from erroneous conviction and ensuring the integrity of the criminal justice system. California v. Trombetta, 467 U.S. 479, 485 (1984). Moreover, in this federal prosecution, the Courts supervisory power to safeguard the correct administration of justice in the federal courts reinforces the due process requirement of disclosure. United States v. Consolidated Laundries Corp., 291 F.2d 563, 571 (2nd Cir. 1961); United States v. Miller, 411 F.2d 825, 832 (2nd Cir. 1969). See generally, Communist Party of the United States v. S.A.C.B., 351 U.S. 115, 124 (1956).

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B.

PRETRIAL DISCLOSURE IS NECESSARY Disclosure of information impeaching the credibility of witnesses must be timed to enable

effective preparation for trial. See United States v. Avery, 208 F.3d 597, 602 (7th Cir. 2000) (setting forth the time available for preparation and the availability of discovery as a basis to continue a criminal trial). Indeed, even when the favorable information takes the form of a witness statement otherwise protected from pretrial discovery by the Jencks Act (18 U.S.C. 3500), the prosecution must nonetheless disclose it as far in advance of trial as Due Process may practically require for the defense to make fair use of it. It is recognized that even Jencks disclosure before trial is a salutary practice and we encourage it. United States v. Murphy, 569 F.2d 771, 774 (3d Cir. 1978). Furthermore, even when due process itself does not require disclosure, the ends of judicial economy, careful trial preparation and clarity of evidentiary presentation will be greatly benefited by pretrial production of the requests made here. If such disclosure is delayed until the eve of trial, the Defendant may find himself unable to adequately conduct cross-examination, necessitate a continuance during the trial. C. SPECIFIC REQUESTS FOR DISCLOSURE All information regarding informants and cooperators is necessary in order to properly prepare a defense in this matter. Giglio v. United States, 405 U.S. 150 (1972). Crossexamination of the confidential informant may be a critical part of the defense. This crossexamination must be complete and thorough in order to protect Stuarts rights. See Washington v. Texas, 388 U.S. 14 (1967). In order to properly cross-examine an informant, the defense must be aware of all information relating to the informants and cooperating witnesss credibility, including any incapacity issues, biases, prejudices or motives, as well as the substantive evidence

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in the informants possession regarding entrapment. The inherent unreliability of the testimony of accomplices or government informants underscores the need for complete disclosure of information relating to their credibility. See United States v. Caldwell, 466 F.2d 611 (9th Cir. 1972). [T]he use of informants to investigate and prosecute persons is fraught with peril. .... By definition, criminal informants are cut from untrustworthy cloth and must be managed and carefully watched by the government and the courts to prevent them from falsely accusing the innocent, from manufacturing evidence against those under suspicion of crime, and from lying under oath in the courtroom. United States v. Mykytiuk, 2003 WL 23208981 (W.D. Wisconsin) (unpublished) (citing United States v. Bernal-Obeso, 989 F.2d 331 (9th Cir. 1993)). To help focus the duty of disclosure, Defendant has itemized likely sources of exculpatory and impeachment information within the knowledge or possession of the prosecution concerning which disclosures the defendant seeks: 1. NAMES AND ADDRESSES

It is well established that where an informants testimony may be relevant and helpful to the defense of an accused his or her identity must be disclosed. Roviaro v. United States, 353 U.S. 53, 60-61 (1957). Even if the informant may not be called to testify for the government, the defense may call him. Id at 629, see also Lopez-Hernandez v. United States, 394 F.2d 820 (9th Cir. 1968); Velarde-Villarreal v. United States, 354 F.2d 9 (9th Cir. 1965). The government has the duty to produce the informant. United States v. Hart, 546 F.2d 798, 799 (9th Cir. 1976). The defendant must also be permitted to interview the informants well in advance of trial. See United States v. Hernandez, 608 F.2d 741 (9th Cir. 1979). The defendant thus requests all names and contact information of the informants.

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2.

PRIOR UTILIZATION OF AND PRIOR TESTIMONY BY INFORMANTS AND COOPERATORS

Stuart requests the existence and identification of each occasion on which the informant or cooperator has testified before any court, grand jury, or other tribunal or body in connection with this or other similar cases. See Johnson v. Brewer, 521 F.2d 556 (8th Cir. 1975). Such evidence is also discoverable, pursuant to Giglio v. United States, 405 U.S. 150 (1972) and United States v. Bagley, 473 U.S. 667 (1985), to aid in the impeachment of a witness. Similarly, the prior testimony of the informant on themes material to his service as an informant should be disclosed where the defense proposes to examine the informant as to those themes at trial. In Mesarosh v. United States, 352 U.S. 1 (1956), the Supreme Court reversed the defendants conviction and remanded for a new trial to allow the defendant to present previously undisclosed evidence that the governments key witness testified falsely in similar, but unrelated proceedings. The Seventh Circuit employs a similar standard. See Larrison v. United States, 24 F.2d 82, 87-88 (7th Cir. 1928) (setting forth a three-part test to determine if a new trial should be granted when newly discovered evidence reveals false trial testimony). 3. PREFERENTIAL TREATMENT GIVEN AND THREATS MADE TO INFORMANTS, COOPERATORS AND WITNESSES INCLUDING MONIES PAID AND PROMISES OF FINANCIAL AWARD

Courts have consistently held that, in attempting to establish motives or bias of a government witness, a defendant may elicit evidence showing that the government has made explicit or implied promises of immunity from prosecution, leniency in sentencing, or other preferential treatment in return for the witnesss cooperation and agreement to testify for the prosecution. Hughes v. United States, 427 F.2d 66, 68 (9th Cir. 1970); United States v.

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Leonard, 494 F.2d 955, 963 (D.C. Cir. 1974); United States v. Fried, 486 F.2d 201, 202 (2nd Cir. 1973); United States v. Campbell, 426 F.2d 547, 549 (2nd Cir. 1970). The Supreme Court has adopted a position requiring expanded disclosure of promises of immunity, leniency, or preferential treatment to government witnesses, and has imposed upon the government the burden of ensuring that full and complete disclosure of such promises is made to the defendants. In Giglio v. United States, 405 U.S. 150, 92 S.Ct. 763, 31 L.Ed.2d 104 (1972), the defendant was convicted of passing forged money orders and was sentenced to 5 years imprisonment. Subsequent to the conviction, the defendants attorney discovered new evidence indicating that the government had failed to disclose a promise made to its key witness that he would not be prosecuted if he testified for the government. In reversing the conviction under the due process criteria of Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), the Court stated in Giglio at 155-56: ...(the witnesss credibility) was therefore an important issue in the case, and evidence of any understanding or agreement to a future prosecution would be relevant to his credibility and the jury was entitled to know of it. This holding in Giglio has been reaffirmed and further strengthened in DeMarco v. United States, 415 U.S. 449, 94 S.Ct. 1185, 39 L.Ed.2d 501 (1974). DeMarco involved a defendant who was convicted of a narcotics offense after a trial at which the government had introduced the testimony of a witness who had been indicted along with the defendant. The witness testified that the government had made no promises to him with respect to the disposition of the case against him. While the defendants appeal was pending, the witness pleaded guilty to a milder charge contained in a superseding indictment, and statements of the United States Attorney at the witnesss sentencing tended to show that some promise might have in fact been made. The Supreme Court remanded for a hearing on the factual issue of whether a promise had, in fact,

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been made before the defendants trial. Unquestionably, said the Court, had there been a promise to the witness prior to his testimony, Giglio ... would require reversal of petitioners conviction. DeMarco v. United States, 415 U.S. at 450. By this request, Stuart seeks a full record of all considerations given to the informant and her family as a result of her cooperation in this case as well as any other case in which the informant has provided services. 4. RECORD OF SPECIAL AGENTS HANDLING OF INFORMANTS

In Espinosa-Hernandez, the Eleventh Circuit reversed the district courts failure to grant full discovery as to an undercover agents misconduct relating to the handling of informants. United States v. Espinosa-Hernandez, 918 F.2d 911, 914 (11th Cir. 1990). Cf. Haber v. Wainwright, 756 F.2d 1520, 1523 (11th Cir. 1985) (prior criminal conduct relevant where witness may have been promised immunity). Along the same line, the courts have held evidence of the unreliability of an informant witness to be discoverable and highly relevant information. For example, information regarding prior or contemporaneous perjury or bizarre testimony of an informant must be discoverable. United States v. Mesarosh, 352 U.S.1 (1956). 5. MATERIAL OBTAINED BY INFORMANTS AND COOPERATORS THROUGH CRIMINAL ACTIVITY

This request seeks information reflecting the nature and extent of material obtained by the informant in connection with illegal activities, including the unauthorized conversion of material and documents from Stuarts place of business, New Age Chemical, material that was later provided to investigative agents. Further, it is submitted that this informant may have committed perjury by failing to report income in income tax returns. Such perjury is relevant in the consideration of any evidence presented by the informant. See United States v. Shearer, 794 F.2d 1545, 1551 (11th Cir. 1986). 7
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6.

FILES REFLECTING INFORMANTS OR COOPERATORS BAD CHARACTER

This request seeks information concerning prior misconduct by the cooperating witness in the performance of her role as an informant including, any prior refusal of the informant to testify for or assist the government, any prior allegation that the informant encouraged or participated with another person to commit an offense or made false statements in connection with a criminal investigation; and misconduct by the cooperating witness other than in her role as a cooperating witness, including misconduct that reflects a lack of candor, truthfulness or lawabiding character of the informant, such as uncharged criminal conduct or fraud. The Federal Rules of Evidence grant the Court discretion to permit a defendant to crossexamine a witness regarding specific instances of misconduct (so-called bad acts) even though such behavior does not amount to felony conviction, if the evidence impeaches the witnesss credibility. Rule 608(b), Fed. R. Evid. The purpose of such testimony is to attack the witnesss character for truthfulness, and not to establish bias, interest, or prejudice. See McCormick, Evidence, 42 at 83 (2d ed. 1972). Since this is a permissible area of inquiry, the prosecution must disclose to the defense any behavior of its witnesses which may reasonably be construed as such bad acts. Federal law enforcement agencies maintain at least two separate files on informants. The first is the investigative file, and the second contains the informant or witness background, payments and false identity. In United States v. Brumel-Alvarez, 991 F.2d 1452, 1465 (9th Cir. 1992), the court held that the failure to disclose an internal DEA memorandum regarding the informant conduct, that impeached the informants credibility, was reversible error. Thus the Court required the disclosure of the memorandum pursuant to the dictates of Brady, id. at 1461. An [AUSA] using 8
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a witness with an impeachable past has a constitutionally derived duty to search for and produce impeachment information requested regarding a witness. United States v. Osorio, 928 F.2d 753, 760 (1st Cir. 1991) (citing Giglio). 7. FEDERAL INCOME TAX RETURNS OF ALL INFORMANTS AND COOPERATORS

The defendant specially requests the Federal Income Tax records of all informants and cooperating witnesses. See United States v. Shaffer, 789 F.2d 682, 688-689 (9th Cir. 1986). The defendant is entitled to these records since he has a good faith basis to believe that the informants and cooperators have not paid the proper taxes, misrepresented their earnings in violation of federal law, or received special financial rewards through discounted tax settlements for their cooperation. CONCLUSION WHEREFORE, for all the foregoing reasons, Stuart respectfully moves this Court for an order compelling the immediate disclosure of exculpatory materials regarding informants and government cooperators described herein, including all information provided to the IRS Special Agents by Beverly Schlipp. Respectfully submitted on March 18, 2011. THE BERNHOFT LAW FIRM, S.C. Attorneys for the Defendant, James A. Stuart By: /s/ Robert G. Bernhoft Robert G. Bernhoft Wisconsin State Bar No. 1032777

207 East Buffalo Street, Suite 600 Milwaukee, Wisconsin 53202 (414) 276-3333 telephone (414) 276-2822 facsimile rgbernhoft@bernhoftlaw.com 9
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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) vs. ) ) JAMES A. STUART, JR., ) ) Defendant. ) __________________________________________)

Case No. 10-CR-288

IT IS HEREBY CERTIFIED that true and correct copies of the foregoing document was served via the Courts ECF system to opposing counsel or parties at the following e-mail addresses: Opposing Counsel Asst. U.S. Attorney Matthew Jacobs Dated on March 18, 2011. E-mail address matthew.jacobs2@usdoj.gov

/s/ Daniel Treuden Daniel Treuden

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