The People, Respondent,v.Alfred Gary, Appellant.BriefN.Y.October 13, 2015To be Argued by: ERICA T. DUBNO, ESQ. (Time Requested: 30 Minutes) APL-2014-00238 Nassau County Clerk’s Index No. 225N/11 Appellate Division, Second Department Docket No. 2012-08351 Court of Appeals of the State of New York THE PEOPLE OF THE STATE OF NEW YORK, Plaintiff-Respondent, – against – ALFRED GARY, Defendant-Appellant. REPLY BRIEF FOR DEFENDANT-APPELLANT ERICA T. DUBNO, ESQ. NICOLE NECKLES, ESQ. FAHRINGER & DUBNO 120 East 56th Street, Suite 1150 New York, New York 10022 Tel.: (212) 319-5351 Fax: (212) 319-6657 THOMAS F. LIOTTI, ESQ. LAW OFFICES OF THOMAS F. LIOTTI 600 Old County Road, Suite 530 Garden City, New York 11530 Tel.: (516) 794-4700 Fax: (516) 794-2816 Attorneys for Defendant-Appellant Alfred Gary Table of Contents Table of Authorities ..................................................................................................... iii Counsel's Initial Stipulation to the Admission of a Document, Included Within Thousands of Pages of Exhibits, Which is Later Learned to Contain Highly Prejudicial Hearsay Should Not Bar the Defendant From Challenging the Admissibility of the Hearsay in a Bench Trial ................................................................................................................ 1 The Defense's Objection to the Hearsay During the Testimony of the Prosecution's Very First Witness was Timely and Posed Absolutely No Prejudice to the Prosecution ................................................................................................................ 4 There was Nothing Strategic About the Timing of Counsel's Objection to the Hearsay Evidence .......................................................... 7 This Court Declines to "Elevate Preservation to a Formality that Would Bar an Appeal" Where the Trial Court Had a "Full Opportunity to Review the Issue in Question'' .......................................................................................................... 8 The Trial Court Abused its Discretion in Denying the Defendant's Motion to Strike and Even Implicitly Acknowledged that the Hearsay was Prejudicial ....................................................................................................................... 11 The Cases Cited by the Prosecution Regarding the Preclusive Effect of Waivers are Distinguishable .................................................. 12 The Hearsay Evidence was Not Duplicative ........................................................... 15 The Hearsay Notation was Not Admissible Under Any Exception ................................................................................................................ 16 The Error in Failing to Strike the Hearsay was Not Harmless Especially Where the Evidence was Far From Overwhelming .................................................................................................... 18 The Verdict is Repugnant, and Legally Insufficient, Where the Defendant was Acquitted of the Very Conduct the Prosecution had to Prove -- Beyond a Reasonable Doubt -- to Establish Conspiracy in the Fourth Degree ................................................................................................................ 21 Conclusion ...................................................................................................................... 23 ii Table of Authorities Page Cases People v. De Mauro, 48 N.Y.2d 892, 424 N.Y.S.2d 884 (1979) ............................................................................... 10 People v. Dercole, 52 N.Y.2d 956, 437 N.Y.S.2d 966 (1981) ............................................................................... 10 People v. Gajadhar, 38 A.D.3d 127, 828 N.Y.S.2d 346 (1st Dept. 2007) ................................................................ 13 People v. Gray, 86N.Y.2d 10, 629N.Y.S.2d 173 (1995) ................................................................................... 9 People v. Kennedy, 68 N.Y.2d 569, 510 N.Y.S.2d 853 (1986) .............................................................................. .17 People v. Payne, 3 N.Y.3d 266, 786 N.Y.S.2d 116 (2004) ................................................................................... 8 People v. Ramos, 13 N.Y.3d 914, 895 N.Y.S.2d 294 (2010) .............................................................................. .16 iii Counsel's Initial Stipulation to the Admission of a Document, Included Within Thousands of Pages of Exhibits, Which is Later Learned to Contain Highly Prejudicial Hearsay Should Not Bar the Defendant From Challenging the Admissibility of the Hearsay in a Bench Trial Alfred Gary, a prominent high-end car dealer, was added to a sweeping real estate fraud indictment because he sold cars to some people involved in the conspiracy. Unlike all of the other defendants, who pled guilty because they were part of the criminal conspiracy, Alfred Gary has always maintained his innocence. He even testified in his own defense at trial and, significantly, was acquitted of all counts except a single count of conspiracy in the fourth degree. In advance of trial, for the convenience of the court, his attorney stipulated to the admission of thousands of pages of exhibits into evidence. However, while the prosecution's very first witness was on the stand, defense counsel discovered that a single sheet of paper -- included within a voluminous loan file -- contained the handwritten notation: "1/12 spoke w I Gary and he [quality controlled] all info" (A.129). This hearsay, ·scrawled on the bottom of an allegedly falsified verification of employment, was highly prejudicial to the defense. This is because the hearsay supported the prosecution's claims that Alfred Gary authorized the false verification and that the bank relied on that information in issuing a mortgage. Significantly, counsel's initial stipulation to the admission of the verification, and misunderstanding regarding the document, resulted from the fact that the prosecution actually produced two different versions of the verification -- one that contained the prejudicial hearsay and one that did not (RA. 461-62). Counsel's trial objection to the document was denied and the prejudicial hearsay was admitted into evidence. The weight of that single document led to Alfred Gary's conviction. Thus, in our opening brief we urged that a predominant issue on appeal is whether an attorney's pretrial stipulation to the admission of thousands of pages of documents into evidence, to facilitate the trial, forever binds the defendant and bars any challenge to the admissibility of a previously stipulated to document at trial. 2 The prosecution derides this issue as a "straw man entirely of the defendant's contrivance." Resp. Br. at 13 n. 5. However, the prosecution has repeatedly claimed that the Defendant's objection to the inadmissible hearsay was ~affirmatively waived" by counsel's "stipulations before trial." Resp. Br. in App. Div. at 2. See also Id. at 26 (claiming that the Defendant "waived his right to protest" the hearsay because defense counsel stipulated to the evidence) . In fact, the prosecution previously insisted that "it would be unfair to treat the defendant's stipulation as anything but a waiver barring review of his claims." Id. at 29. 1 Significantly, the Appellate Division embraced the prosecution's draconian view that Alfred Gary's hearsay claims were affirmatively waived by counsel's pretrial stipulation. Indeed, the Appellate Di vision held that the "defendant waived his contention that a document offered by the People contained inadmissible hearsay by, prior to 1 The prosecution reaffirmed this unyielding position in its opposition to Alfred Gary's leave application. There, the prosecution urged that a "stipulation to admit an item into evidence constitutes a waiver of the right to challenge the admissibility of the item on appeal." Resp. Opp. to Leave, dated June 10, 2014, at 4. 3 trial, stipulating to the admission into evidence of that document, among others" (A. 248) (emphasis supplied) . Therefore, there is nothing contrived about the characterization of an issue presented by this case as whether a pretrial stipulation waives any challenge to inadmissible evidence. The Defense's Objection to the Hearsay During the Testimony of the Prosecution's Very First Witness was Timely and Posed Absolutely No Prejudice to the Prosecution The prosecution aims it heaviest shelling at the issue of "preservation" in an effort to escape the consequences of the constitutional violations arising from the erroneous admission of this hearsay. Specifically, the prosecution attempts to deprive this Court of jurisdiction to review Alfred Gary's wrongful conviction by urging that his hearsay challenge was untimely because defense counsel first objected a day after the hearsay was admitted into evidence. See Resp. Br. at 17. 4 However, contrary to the prosecution's assertion, every legal issue presented in this appeal was previously raised and resolved in the trial court. Thus, this constitutional issue regarding a criminal defendant's right to confront the evidence against him eligible for review by this Court. is fully The prosecution blames Alfred Gary for his counsel's allegedly belated recognition of the hearsay. See Resp. Br. at 17 (urging that since the Defendant did not avail himself of a timely objection, "it should redound to no one's detriment but his own"). However, this ignores the reality that the representation of a defendant in a criminal trial is an imperfect science. This is particularly true in a complex conspiracy case, such as this, which involves a multi-count indictment and thousands of pages of exhibits. Indeed, sometimes things slip by even the very best attorney. As a consequence, CPL § 470.05(2), entitled "determination of appeals," specifically provides that a challenge to an evidentiary ruling may be made "at the time of such ruling or instruction or at any subsequent time when the court had an opportunity of effectively changing 5 the same" (emphasis supplied) . Certainly, the primary impulse for the preservation of issues is to afford the trial court an adequate opportunity to rule on them. Here, the defense moved to strike the hearsay when the court still had a full opportunity to exclude this inadmissible prosecution. evidence without any prejudice to Significantly, the very first witness the Carlos Irizarry was still on the stand when defense counsel recognized the error (RA.423). Thus, the objection was made when the court could eliminate the prejudice to the defense by striking the hearsay. This is particularly true where it was a bench trial. Thus, unlike a jury, the judge could more easily disregard the inadmissible hearsay. Despite the fact that criminal trials are a human enterprise, the prosecution proposes an absolutist approach whereby this Court is deprived of its jurisdiction to review a constitutional violation merely because it was raised on the second day of a lengthy bench trial, rather than the first day. However, the prosecution's harsh stance fails to consider that the objection was still raised when the court could effectively change its decision without any prejudice to the prosecution. See CPL § 470.05(2). And, the 6 trial court heard extensive argument on the very issue that the prosecution now claims was waived for appellate review! See, ~' RA.422-24, 435, 461-65, 501-12. The There was Nothing Strategic About the Timing of Counsel's Objection to the Hearsay Evidence prosecution claims that "valid strategic considerations" supported defense counsel's failure to object when the hearsay was initially introduced into evidence. Resp. Br. at 15. The prosecution speculates that "[h]ad he raised a timely objection to the admissibility of any portion of the exhibit, the defendant may well have faced even more damaging testimony from a representative of the lending institution" that relied on the verification of employment. Id. However, there is no merit to this claim. Defense counsel achieved no po~sible strategic advantage by not objecting more quickly to the hearsay. Indeed, counsel's objection to the patent hearsay was made while the prosecution's first witness was still on the stand (RA.422). And, the prosecution's direct case continued with additional witnesses for the balance of the week (RA.858). 7 This Court Declines to "Elevate Preservation to a Formality that Would Bar an Appeal" Where the Trial Court Had a "Full Opportunity to Review the Issue in Question" The cases cited by the prosecution for the claim that this issue was not preserved for review by this Court are readily distinguishable and actually undermine the prosecution's position. For instance, the prosecution relies on Judge Read's dissent in People v. Payne, 3 N.Y.3d 266, 274, 786 N.Y.S.2d 116, 120 (2004), for the proposition that " [ g] enerally, a question of law is an issue that was preserved by a sufficiently specific and timely objection at trial." However, in Payne the majority expressly declined to "elevate preservation to a formality that would bar an appeal even though the trial court, aware that [a motion to dismiss] was pending, had a full opportunity to review the issue in question." 3 N.Y.3d at 273, 786 N.Y.S.2d at 120. This equitable approach was recently reaffirmed in People v. Finch, where this Court reiterated the importance of, and reasons for, the preservation rule. 23 N.Y.3d 408, 413- 8 14, 991 N.Y.S.2d 552, 555-56 (2014) . 2 However, the Court also reaffirmed that there will be cases where the "lack of a specific motion has caused no prejudice to the People and no interference with the swift and orderly course of justice." Finch, 23 N.Y.3d at 414, 991 N.Y.S.2d at 557 (emphasis supplied). Certainly, that is the case here where there was absolutely no prejudice to the prosecution by the objection which was raised while the first witness was still on the stand and fully accessible to both parties. And, there was no interference with the swift and orderly course of justice based on the objection that was made on the second day of this two-week bench trial. 2 The preservation rule ( 1) brings claims to the trial court's attention; (2) alerts all parties to the alleged deficiencies in the evidence and advances the truth-seeking purpose of the trial; and ( 3) advances the goal of swift and final determinations of a defendant's guilt or non- guil t. See People v. Gray, 86 N.Y.2d 10, 20, 629 N.Y.S.2d 173, 176 (1995). Each of these laudable objectives was achieved here, where counsel brought the hearsay claim to the trial court's attention while the witness was still on the stand, alerted the parties to the nature of the objection, and the objection did not delay the proceedings. 9 Similarly, in People v. De Mauro, 48 N.Y.2d 892, 893, 424 N.Y.S.2d 884, 886 (1979), cited by the prosecution, the defendant's motion for a mistrial based upon the inadvertent disclosure of the defendant's incarceration was untimely because the motion was not made until after the witness completed her testimony. Here, in marked contrast, counsel's objection was timely because it was made with sufficient time to cure any harm and while the witness was / still available and on the witness stand. Finally, the prosecution cites to People v. Dercole, 52 N.Y.2d 956, 437 N.Y.S.2d 966 (1981), for the proposition that an appeal may be dismissed for lack of a timely objection. However, in Dercole the Court dismissed an appeal by the prosecution from the Appellate Division's finding that verdicts in a bench trial were repugnant. The repugnancy issue was, apparently, only raised for the first time on appeal. As a consequence, Dercole is light years from Alfred Gary's case where the issue on appeal was fully developed before the trial judge and presented sufficiently early to have caused no prejudice to the prosecution. 10 The Trial Court Abused its Discretion in Denying the Defendant's Motion to Strike and Even Implicitly Acknowledged that the Hearsay was Prejudicial The prosecution urges that even if this constitutional issue is eligible for review by this Court, the trial court did not abuse its discretion in denying the Defendant's motion to strike the hearsay. See Resp. Br. at 18. In that regard, the prosecution retreats back, once again, to the familiar claim that the defense waived its "right to raise objections to this evidence" because it was included within counsel's bulk pretrial stipulation to thousands of pages of records. 3 Resp. Br. at 19. However, as developed in our opening brief, there were two versions of the verification form -- one that contained the handwritten hearsay notation on the bottom of the page and one that did not (RA.461). And, counsel was under the reasonable impression that the version being stipulated into evidence was the copy that did not contain the hearsay · (RA. 465). Indeed, the trial court was concerned that "there 3 As noted in our opening submission, over 150,000 items of Rosario material, files, including more than 100 exhibits to 400 pages long (RA.52, 66, 67). 11 this case involved as well as 24 loan each running up was one document that has writing on it and Mr. Liotti has a document that does not have writing on it" (RA.464). The trial judge also apparently recognized the highly prejudicial nature of the hearsay. In fact, the court conceded that it "would have had a different ruling" i.e., would have struck the hearsay -- if there had been an earlier objection to the testimony regarding the statement (RA. 464) (emphasis supplied). The trial judge's skepticism over the admissibility of the hearsay speaks volumes. The Cases Cited by the Prosecution Regarding the Preclusive Effect of Waivers are Distinguishable Waiver of a constitutional claim is an extremely harsh sanction and should only be condoned where a defendant unequivocally and affirmatively agrees to relinquish the right or claim. It should not be endorsed where counsel inadvertently acquiesced to the admission of an exhibit which, in due course, he realized was in error, and sought to strike from evidence. This is especially true where, as here, a judge could disregard the erroneously admitted evidence -- but failed to do so. 12 The cases cited by the prosecution, for its claim that the defense "affirmatively waived" its objection to the critical hearsay, are distinguishable. See Resp. Br. at 19. For example, in People v. Gajadhar, 38 A.D.3d 127, 828 N.Y.S.2d 346 (1st Dept. 2007), the defendant affirmatively consented to the continuation of deliberations with only 11 jurors after a juror was hospitalized. The defendant knowingly signed a written "Waiver of Twelve Person Jury Trial," which stated that he had been advised of his right to be tried by 12 jurors, and expressly agreed to waive his rights. The defendant also opposed the declaration of a mistrial, and the trial judge specifically confirmed that the defendant agreed to the terms of the waiver after conferring with counsel. Thus, there was an explicit, carefully considered and deliberate waiver in Gajadhar. In stark contrast, there was never any knowing waiver of the hearsay claim by Alfred Gary. Instead, the devastating, but secluded, statement initially slipped below the "radar" of counsel's consciousness because it was buried within thousands of pages of exhibits -- and there were two versions of the same verification. 13 There is also no merit to the prosecution's claim that granting the motion to strike would have "further delayed the trial" because time would have been needed for it to "locate and prepare a wi~ness from the lending institution" to testify about the handwritten notation. Resp. Br. at 20- 21. This was not a particularly arduous task, especially because the prosecution knew the identity of the witness from Countrywide Home Loans Niurka Rodriguez allegedly made the notation on the verification employment. See Resp. Br. at 7. who of Moreover, after the objection was raised on March 16, 2012, the bench trial continued on March 19, March 20, March 21, March 22, March 26 and March 27, 2012 (RA.472, 636, 780, 943, 1086, 1196). Surely the experienced and capable prosecutors who handled this case could have prepared Ms. Rodriguez for her brief testimony during this two-week period. 14 The Hearsay Evidence was Not Duplicative The prosecution endeavors to minimize the dire consequences of the hearsay by now urging that the evidence was merely duplicative of other trial evidence. See Resp. Br. at 14-15. However, this claim was never raised in the Appellate Division. To the contrary, there the prosecution relied heavily on the handwritten notation to link Alfred Gary to the alleged mortgage fraud. See Resp. Br. in the App. Div. at 6, 15-16, 20. Furthermore, the handwritten notation on the verification of employment was substantially more prejudicial than the computer-generated "servicing notes." Significantly, the handwritten note, which was admitted for its truth, stated that the writer "spoke w/ Gary" who quality checked the information (A.129). In marked contrast, the servicing notes -- reproduced at RA.11-21 -- do not state that the bank's representative ever spoke with the Defendant, Alfred Gary, and confirmed the information. Instead, at most, those notes relate to an "Allen" Gary. See RA.13. 4 4 The prosecution presumes that the trial judge reviewed the 15 The Hearsay Notation was Not Admissible Under Any Exception The prosecution raises, for the first time, the claim that the verification of employment and its hearsay notation were admissible as a business record. See Resp. Br. at 21. However, the prosecution never established the crucial foundational prerequisites for the admission of the evidence under CPLR § 4518. No evidence was presented that the scribbled notations on the bottom of the form were made routinely or kept as part of the regular course of business. See, e.g., People v. Ramos, 13 N.Y.3d 914, 895 N.Y.S.2d 294 (2010) (holding that the trial court erred in admitting hearsay evidence, under the aegis of the business records exception, without a proper foundation) . servicing notes during the short period between when the hearsay was admitted into evidence and when counsel objected, the very next day. See Resp. Br. at 18, 20. However, there is no evidence in the record to support that presumption. Moreover, unlike lay jurors, experienced judges are less susceptible to the prejudices that result from momentary exposure to inadmissible or disputed testimony. 16 Significantly, in People v. Kennedy, 68 N. Y. 2d 569, 510 N.Y.S.2d 853 (1986), cited by the prosecution, this Court also found that the People failed to establish a sufficient foundation for documents under the business records exception to the hearsay rule. The Court underscored that there is a "countervailing interest of fairness to the party against whom the records are admitted," especially, in a criminal case, where the "accused has a constitutional right of confrontation." 68 N.Y.2d at 579, 510 N.Y.S.2d at 859. As a consequence, there is no basis for the prosecution's claim here that this treacherous form of proof would have permeated the trial under the business records exception. 17 The Error in Failing to Strike the Hearsay was Not Harmless Especially Where the Evidence was Far From Overwhelming Finally, the prosecution urges that "any error in the court's ruling was harmless." Resp. Br. at 21-23. However, refusing to strike the hearsay that purportedly linked Alf red Gary to the real estate conspiracy turned out to be an error of incalculable consequence. As developed in our opening brief, the evidence connecting Alf red Gary to the conspiracy was far from overwhelming. Even though one of the prosecution's chief witnesses, Carlos Irizarry, vaguely claimed that Alfred Gary completed three false verifications of employment (RA. 262), the prosecution never presented any evidence to confirm that bald allegation. Instead, out of the thousands of pages of records in this case, the prosecution concededly only introduced one single verification, which it tried to attribute to Alfred Gary -- Exhibit 17C (Resp. Br. at 4 n.3; A.129). Moreover, the very face of that exhibit established that Alfred Gary did not falsely verify anyone's employment. 18 For example, Carlos Irizarry admittedly completed much of the information on the form including the applicant's date of employment, position, and prospects of continued employment (RA.425). And, the remainder of the verification was clearly not completed by Alfred Gary since even his name is spelled and signed wrong on the form! (RA.270, 434; A.129). This is powerful proof that Alfred Gary did not prepare, sign or authorize the verification. In our opening brief we also demonstrated that the prosecution's key witness, Tony Smith, testified under oath that Alfred Gary believed the funds he obtained from the Group to purchase and lease cars "were legitimately gotten from legitimate real estate transactions" (RA.700). Mr. Smith further stated that he had no reason to believe that Alfred Gary was involved in any illegal activity (RA.644). The prosecution endeavors to minimize this dispositive disclosure regarding Alfred Gary's involvement in illegal activity by claiming that Tony Smith's testimony was merely the "single word" "correct" (Resp. Br. at 34). However, a single word from a witness can be as decisive, if not more so, than a lengthy response. Certainly, if the witness had answered "correct" to a question of "did you have reason to 19 believe that Alfred Gary was involved in illegal activity," the prosecution would have exploited such a dramatic concession in its brief. The prosecution further suggests that Tony Smith's statement regarding Alfred Gary's lack of involvement in criminal conduct was taken out of context (Resp. Br. at 34- 35). Thus, the prosecution strives to limit that statement to a single wire transfer on March 18, 2008, when Mr. Gary received $147,000 to purchase a new Mercedes Benz for James Sweet (Resp. Br. at 35) . However, the statement clearly related to Alfred Gary's knowledge of all misconduct. Moreover, even if the statement was limited in scope to a specific date which is disputed this was still a critical time during the allegations in this case, which spanned from October 1, 2004 to March 19, 2009 (A.56). As a consequence, there is no merit to the prosecution's claim that the Defendant distorted the trial record to "obscure the strength" of the prosecution's proof. See Resp. Br. at 31-36. Instead, the evidence undermining this flawed conviction was accurately presented to this Court. 20 For all these reasons, the error in admitting this hearsay, in an effort to tie Alfred Gary to the conspiracy, was not harmless and warrants a reversal of the last remaining count under the indictment. The Verdict is Repugnant, and Legally Insufficient, Where the Defendant was Acquitted of the Very Conduct the Prosecution had to Prove - Beyond a Reasonable Doubt - to Establish Conspiracy in the Fourth Degree Our opening brief also established that the verdict was repugnant and insufficient because Alfred Gary, who was acquitted of virtually every count, including all of the top charges, had been found not guilty of the very conduct that the prosecution was required to prove beyond a reasonable doubt -- to support a conviction for conspiracy in the fourth degree. The prosecution claims that the verdict was not repugnant because the offenses for which Alfred Gary was acquitted -- money laundering and scheme to defraud -- have different elements than conspiracy (Resp. Br. at 37). However, that is not the essence of the Defendant's claim. Instead, the defense urged that the prosecution failed to establish a critical element of conspiracy in the fourth degree -- that the Defendant intended to commit the class C 21 felony of grand larceny in the second degree (Appellant's Br. at 8) . Here, the allegations of grand larceny -- obtaining funds from certain lenders by procuring mortgages through false information or fraudulent documents -- were identical to the elements of the scheme to defraud charged in Count 3 (A. 56, 61). And, since Alfred Gary was acquitted of that scheme to defraud, he could not, as a matter of law or fact, be convicted of conspiracy in the fourth degree, which required the prosecution to prove that Alfred Gary intended to commit that very same conduct. Thus, the I conviction should be reversed and the judgment vacated. We rely on our opening brief for any issues that were not addressed in this reply. 22 Conclusion For all the reasons stated, as well as those contained in our opening brief, the Court should reverse the Defendant's conviction; vacate the Judgment and sentence, as well as the Judgment Order of Restitution; and dismiss the indictment or, in the alternative, grant a new trial; and grant such other and further relief as is just under all the circumstances. Dated: New York, New York May 8, 2015 Respectfully submitted, Erica T. Dubno, Esq. Nicole Neckles, Esq. Fahringer & Dubno 120 East 56th Street, Suite 1150 New York, New York 10022 (212) 319-5351 erica.dubno@fahringerlaw.com Thomas F. Liotti, Esq. 600 Old Country Road, Suite 530 Garden City, New York 11530 (516) 739-3700 tom@tliotti.com Counsel for Alf red Gary 23