Opinion
Cause No. IP 04-126-CR-03 H/F.
April 8, 2005
ENTRY ON GOVERNMENT'S MOTION IN LIMINE
A grand jury indicted defendant Edwin W. Blinn, Jr. and three other individuals for charges stemming from distribution of marijuana. Blinn is not a defendant on the marijuana charges, but was named in two counts for money laundering. Count Four alleges that Blinn conspired with Joshuah Kemp to commit money laundering of marijuana proceeds in violation of 18 U.S.C. § 1956(h). Count Five charges Blinn with one substantive money laundering violation of 18 U.S.C. § 1956(a)(1)(B)(i) and 18 U.S.C. § 2. The indictment accuses Blinn of engaging in a series of transactions for purchase and sale of motor vehicles to assist co-defendants Joshuah Kemp and Mashawn Kemp launder profits from their marijuana trafficking. (The Kemps have pled guilty to some of the charges against them.)
The government has filed a notice that at trial, it intends to offer evidence of statements that Blinn made to law enforcement agents in a proffer session held on April 22, 2003. Blinn made the statements under a written use immunity agreement. The government contends that Blinn later violated the terms of the use immunity agreement, so that the terms of the agreement allow the government to use his statements as evidence. The government has asked for a ruling prior to trial. Blinn opposes admission of his statements made in the proffer session. The court held an evidentiary hearing on March 25, 2005 and heard testimony from Bill Norton, a retired Lieutenant of the Grant County Sheriff's Department, DEA Agent Noel Gaertner, and William Arment, a retired special agent with the Internal Revenue Service. Neither defendant Blinn nor his former attorney Shane Beal testified. The court now states its findings of fact and conclusions of law.
Findings of Fact
During 2002, local, state and federal law enforcement agencies were investigating the four defendants named in this indictment — Joshuah Kemp, Mashawn Kemp, Blinn, and Walter Applewhite — and other persons for trafficking in marijuana and money laundering of the marijuana profits. On July 26, 2002, Blinn spoke with Lieutenant Bill Norton of the Grant County Sheriff's Department. They met at a restaurant in Marion, Indiana. Norton told Blinn of the investigation. On August 12, 2002, Norton and DEA Agent Noel Gaertner visited Blinn's auto dealership and served a subpoena for records. Blinn provided some purported responsive documents a few days later. The investigation continued.
The critical events here occurred at a meeting on April 22, 2003 at the office of the United States Attorney in Indianapolis. Blinn came to the meeting with his attorney at the time, Shane Beal. On the government side were Assistant United States Attorney Major Coleman, Lieutenant Norton, DEA Agent Gaertner, and IRS Agent William Arment. Before the substantive interview began, AUSA Coleman, Blinn, and attorney Beal signed a three-page letter. The letter is a use immunity agreement for Blinn's cooperation with the government. The letter agreement provided specifically:
1. The government agrees that it cannot use, directly or indirectly, any oral statement made, any sworn testimony given or any written document produced by you in a criminal prosecution against you with the following two exceptions:
a. In the event you were to testify falsely before any grand jury or at trial, you could be prosecuted for false statements before a grand jury or perjury, whichever is appropriate; and
b. Any actions which resulted, directly or indirectly, in physical action to another individual.
This means that the government cannot use, directly or indirectly, the information which you provide pursuant to this agreement in prosecuting you criminally for any crimes you admit or reveal in such statements or documents.
2. You agree that you shall give complete, total and truthful debriefings concerning any and all information regarding the involvement of you, and others in controlled substances, without restriction to the Southern District of Indiana or to any charge presently pending. In addition you agree that you shall give complete, total and truthful testimony before grand juries and at trials, as deemed necessary by the government, concerning any and all information provided by you during the course of your debriefings.
This cooperation agreement extends beyond the Southern District of Indiana, to the extent any other judicial district agrees to accept the terms of this use immunity/cooperation agreement.
3. You further acknowledge and agree that the government's grant of use immunity herein is entirely conditioned upon your complete compliance with Paragraph 2, above. Should you make any materially false statement or omission, then the government would be entitled to use your statements and documents, directly and indirectly, to institute and support a criminal prosecution for any substantive offense as well as a prosecution for giving false statements and perjury. In other words, the government will be relieved of its obligations under Paragraph 1, above should you fail to be entirely candid and forthright to the government, the grand jury or petit jury.
The letter contains no statements either way as to whether Blinn would be charged with a federal crime or would plead guilty to a federal crime. The letter governs only the use of statements Blinn might make in interviews with the government agents and documents he might provide to them.
After Blinn, Beal, and Coleman signed the use immunity agreement, the entire group met together for questioning of Blinn. After some 30 to 45 minutes, the law enforcement officers suggested taking a break because they felt that Blinn was not being completely truthful with them and was trying to minimize his activity and culpability. Blinn caucused with his lawyer for a few minutes, and the interview then resumed.
At some point in the meeting with Blinn on April 22, 2003, the law enforcement side of the meeting stated that they might or would expect Blinn to plead guilty to a misdemeanor charge of violating cash transaction reporting requirements. See 26 U.S.C. § 7203. AUSA Coleman added that there was no definite plea offer on the table. Under the terms of the use immunity agreement, the government was free to pursue such a misdemeanor charge against Blinn so long as it did not use, directly or indirectly, any statements Blinn made under the protection of the use immunity agreement. The government agents believed that they had enough evidence against Blinn before the proffer session to pursue and prove a misdemeanor cash reporting charge against Blinn regardless of what he said in the proffer session.
Such a prosecution could be difficult to pursue after an immunized proffer session. The government must be prepared to show that it is not using any immunized statements, directly or indirectly. See, e.g., United States v. Velasco, 953 F.2d 1467, 1474 (7th Cir. 1992) (where government prosecutes witness who has given immunized testimony, it must meet "heavy burden of proving that all of the evidence it proposes to use was derived from legitimate independent sources"), quoting Kastigar v. United States, 406 U.S. 441, 461-62 (1972).
The April 22nd meeting ended approximately one and a half hours to two hours after it first began. At the conclusion of the meeting, Blinn and attorney Beal were still indicating that they intended for Blinn to continue his cooperation. The law enforcement agents reasonably expected to be able to follow up with further interviews of Blinn.
AUSA Coleman and the agents left messages for attorney Beal in the following weeks, but their messages were not returned. Finally, in June 2003, DEA agent Gaertner traveled to Marion. He and Lt. Norton tracked down Beal at the Grant County Courthouse. In a brief conversation, Beal said that Blinn was "done" talking to law enforcement. In a later conversation with Beal on September 22, 2003, Beal repeated that Blinn was not willing to cooperate further. The law enforcement investigation continued, leading eventually to the return of the pending indictment against Blinn, the Kemps, and Applewhite.
Conclusions of Law
The evidence shows that Blinn entered into a valid use immunity agreement, that he breached the critical term in that agreement, and that under the terms of the agreement, his breach released the government from its promise of use immunity for statements made in the April 22, 2003 proffer session.
In general, a proffer agreement is a contract and is interpreted and enforced as any other contract would be. United States v. Reed, 272 F.3d 950, 954 (7th Cir. 2001); United States v. Griffin, 84 F.3d 912, 919 (7th Cir. 1996). The evidence here shows that Blinn, knowing he was the subject of a federal drug investigation, entered into a binding use immunity agreement upon the advice of counsel. There is no reason to question the validity of his agreement.
The use immunity agreement did not guarantee complete immunity from prosecution, but it gave him substantial benefits. Most important, as long as he cooperated truthfully, his statements could not be used against him. If the government wanted to pursue a prosecution of Blinn, it would have been required to show that it was not relying, directly or indirectly, on any information Blinn had provided to it. See, e.g., United States v. Velasco, 953 F.2d 1467, 1474 (7th Cir. 1992) (where government prosecutes witness who has given immunized testimony, it must meet "heavy burden of proving that all of the evidence it proposes to use was derived from legitimate independent sources"), quoting Kastigar v. United States, 406 U.S. 441, 461-62 (1972); United States v. Poindexter, 951 F.2d 369, 373 (D.C. Cir. 1991) (reversing convictions where government could not show it had not made use of defendant's immunized testimony before Congress); United States v. North, 920 F.2d 940, 942-43 (D.C. Cir. 1990) (as amended on rehearing) (reversing convictions where government failed to show that testimony from government witnesses who had been exposed to defendant's immunized testimony before Congress was not influenced by such exposure).
The evidence shows that Blinn breached the terms of the use immunity agreement. He agreed in Paragraph 2 to give "complete, total and truthful debriefings concerning any and all information regarding the involvement of you, and others in controlled substances. . . ." He had not fulfilled that obligation when the proffer session ended on April 22, 2003. Although the court did not hear evidence from either AUSA Coleman or attorney Beal, it is clear from the actions of Agent Gaertner and Lt. Norton that everyone expected the Blinn debriefings to continue because he had not yet provided the required "complete, total and truthful debriefings" in that first interview. There is no evidence that Blinn had fully complied with that obligation. Blinn's later refusals to meet with government agents, as communicated through attorney Beal, clearly amounted to a breach of Blinn's contractual obligations.
The use immunity agreement spelled out the consequences of such a breach of the requirements of Paragraph 2. Paragraph 3 provided that in the event Blinn failed to fulfill his obligations of complete, total and truthful debriefings (and testimony if requested), the government would be entitled to use his statements and documents against him. "Should you make any materially false statement or omission, then the government would be entitled to use your statements and documents, directly and indirectly, to institute and support a criminal prosecution for any substantive offense as well as a prosecution for giving false statements and perjury." (Emphasis added.) Paragraph 3 then repeated for emphasis: "In other words, the government will be relieved of its obligations under Paragraph 1 [the promise of use immunity], above should you fail to be entirely candid and forthright to the government, the grand jury or petit jury." Accordingly, Blinn's breach of the agreement has relieved the government of its promise of use immunity. The government may offer evidence of Blinn's statements at trial in this case.
In opposing this result, Blinn offers a number of arguments. First, Blinn argues in essence that his agreement was a different agreement, one in which he would tell the agents what he was willing to tell them in a proffer session, and that the parties would later try to reach a definitive plea agreement if the government thought his cooperation warranted a break. Under this version of events, if the parties did not reach an agreement, they could proceed to trial and the government could not use Blinn's proffer against him (subject to possible exceptions for impeachment if he testified, for example). From Blinn's point of view, he was not willing to plead guilty to the misdemeanor cash transaction reporting violation, so he was free to walk away from the proffer session.
This argument is based on a paradigm that often prevails when a defendant has been charged and wants to work out a deal with the government. In such a case, the government typically has already presented its case to a grand jury and has secured an indictment. The government usually is not looking to the proffer session to build its case against the defendant, but to evaluate whether he can help secure convictions of others who have committed crimes. Neither side is bound to enter a plea agreement, and the plea negotiations occur under the protection of Rule 11 of the Federal Rules of Criminal Procedure and Rule 410 of the Federal Rules of Evidence.
The problem with this argument is that it is not based on the agreement that Blinn and his attorney actually signed. Blinn signed a use immunity agreement, one that would have made it difficult for the government to prosecute him without showing that it already had a "canned" case against him that could be pursued and proved without using any information that came from Blinn. See Velasco, 953 F.2d at 1474; North, 920 F.2d at 942-43; Poindexter, 951 F.2d at 373. That agreement did not give Blinn transactional immunity, but it still gave him considerable protection. That protection was available only if Blinn fulfilled his obligation to provide complete, total and truthful debriefings. He did not do so.
In opposing admission of his statements, Blinn points out correctly that he was never required to provide information sufficient to indict or convict any other persons. The government does not claim there was such a term. The clear terms of the use immunity agreement, however, required Blinn to provide further debriefings after the April 22nd session. He did not do so.
Blinn contends that his only obligation was to tell the truth in any statements that he chose to make. That is not what the use immunity agreement says. He was obligated to tell the government agents the truth. But he was also obligated to tell the whole truth. Paragraph 2 required him to give "complete, total and truthful debriefings" concerning involvement by him and others in controlled substances. In return for the valuable promise of use immunity, he agreed to tell the government everything he knew. At the same time, he agreed in Paragraph 3 that if he did not fulfill that obligation, the use immunity would evaporate, and the government could use his statements against him.
In a variation on contract law, Blinn also contends that the government offered him a contract of adhesion and that he had no choice but to sign it. Def. Br. at 5-6. That argument is groundless in fact and law. Apart from the fact that neither Blinn nor attorney Beal testified in support of the argument, Blinn had another choice open to him. He could simply assert his constitutional rights and refuse to talk to the government. He was not required to sign the agreement. Also, Blinn was represented by counsel as he was facing and making his choice.
Blinn also attempts to rewrite the agreement as one in which the government was reserving the right to decide what benefit to confer on Blinn, if any. Blinn then contends that such an agreement is illusory and void. The government's promise was not illusory. The government made a promise that could have been very valuable to Blinn — use immunity. That promise was conditioned on Blinn's own promises. Blinn then chose to breach his promise to provide complete, total, and truthful debriefings. Under the terms of Paragraph 3 of the use immunity agreement, Blinn's breach of his promise under Paragraph 2 relieved the government of its obligation to provide use immunity. E.g., United States v. Reed, 272 F.3d 950, 954 (7th Cir. 2001) (affirming conviction obtained with statements made under limited use immunity agreement after defendant breached agreement by lying to investigating agents); United States v. Mattison, 153 F.3d 406, 412 (7th Cir. 1998) (affirming conviction obtained with statements made under use immunity agreement after defendant breached agreement by failing to provide information after first meeting with agents).
Blinn also argues that he should not be held to a promise of complete cooperation for an indefinite future. The evidence here shows that in September 2003, more than four months after the April 22nd meeting and after it was clear that Blinn was refusing to cooperate, Blinn found about two pounds of marijuana in a vehicle that one of his employees had been using. Agent Gaertner contacted attorney Beal on September 22nd to see if Blinn wanted to talk about the incident. Beal again told Agent Gaertner that Blinn was not willing to cooperate. The court is not relying on those events in holding that statements from the April 22nd meeting may be admitted. Blinn had definitively breached the use immunity agreement no later than June 2003, when Beal told Agent Gaertner and Lt. Norton that Blinn would not be talking to them again. The September incident adds nothing to the government's case for admission of the April 22nd statements.
Finally, Blinn argues that the government was not harmed by his breach because it was still able to prosecute the Kemps successfully. The argument reflects a misunderstanding of contract law. Blinn breached the only promise he made in the contract. Yet he seeks to enforce the government's contractual promise of use immunity. That is not the way contract law works. Where Blinn materially breached the agreement, and where the agreement itself spells out the consequences of such a breach, those agreed consequences may be imposed by the court's order. Blinn is not entitled to breach his only promise and to enforce against the government its central promise.
Conclusion
For the foregoing reasons, the court finds that the government may offer evidence at trial of statements that defendant Blinn made under the use immunity agreement dated April 22, 2003.So ordered.