USA v. Giraudo et al

Memorandum In Opposition Defendants' Response to Government's Brief Regarding Use of Stationary Audio Recordings

N.D. Cal.September 30, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB LATHAM & WATKINS LLP Daniel M. Wall (Bar No. 102580) dan.wall@lw.com Ashley M. Bauer (Bar No. 231626) ashley.bauer@lw.com Alicia R. Jovais (Bar No. 296172) alicia.jovais@lw.com 505 Montgomery Street, Suite 2000 San Francisco, California 94111-6538 Telephone: +1.415.391.0600 Facsimile: +1.415.395.8095 Attorneys for Defendant Abraham S. Farag Additional Counsel on Signature Page UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION UNITED STATES OF AMERICA, Plaintiff, v. JOSEPH J. GIRAUDO, RAYMOND A. GRINSELL, KEVIN B. CULLINANE, JAMES F. APPENRODT, and ABRAHAM S. FARAG, Defendants. CASE NO. CR 14-00534 CRB DEFENDANTS’ RESPONSE TO GOVERNMENT’S BRIEF REGARDING USE OF STATIONARY AUDIO RECORDINGS Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 1 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB TABLE OF CONTENTS Page I. SUMMARY OF ARGUMENT ......................................................................................... 1 II. ARGUMENT ..................................................................................................................... 4 A. The Government Cannot Satisfy Its Burden on Taint Because It Does Not Know How the Recordings Were Used. ................................................ 4 1. The Declarations of Agent Wynar and Agent Bond Reveal Holes in the Government’s Submission. .................................................... 4 2. The Government’s Records Are Incomplete and Unreliable. .................... 5 3. Because the Government Does Not Know How the Recordings Were Used, the Court Should Suppress All Evidence Obtained After the Illegal Recording Scheme Began. ........................................................................................................ 8 B. In the Alternative, the Government Must Specifically Identify the Evidence It Intends to Rely on at Trial and Produce the Records and Testimony Necessary to Establish that Its Evidence Is Untainted. ............................................................................................................... 8 1. The Government Must Produce All Materials Relating to the Use of the Illegal Recordings. .............................................................. 9 2. Defendants Are Entitled to Cross-Examine the FBI Agents and Government Attorneys Who Investigated this Case. ........................ 10 3. The Government Must Produce Evidence Establishing that the Testimony of Cooperators Whose Counsel Were Shown Illegal Recordings During Plea Negotiations Is Untainted. ..................... 12 III. CONCLUSION ................................................................................................................ 15 Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 2 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB TABLE OF AUTHORITIES Page(s) CASES Alderman v. United States, 394 U.S. 165 (1969) ......................................................................................................... passim Baker v. United States, 430 F.2d 499 (D.C. Cir. 1970) ...........................................................................................10, 11 Greenpeace v. Nat’l Marine Fisheries Serv., 198 F.R.D. 540 (D. Nev. 2000)..................................................................................................9 Hemstreet v. Duncan, No. CV-07-732-ST, 2007 WL 4287602 (D. Or. Dec. 4, 2007) .................................................9 Matsuura v. E.I. du Pont de Nemours & Co., 330 F. Supp. 2d 1101 (D. Haw. 2004), rev’d on other grounds, 431 F.3d 353 (9th Cir. 2005) ..........................................................................................................................13 Moreno v. Autozone, Inc., No. C-05-4432 CRB (EMC), 2008 WL 906510 (N.D. Cal. Apr. 1, 2008)................................9 Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (1993) .................................................................................................................12 United States v. Ailemen, 43 F. App’x 77 (9th Cir. 2002) ................................................................................................13 United States v. Ceccolini, 435 U.S. 268 (1978) .................................................................................................3, 12, 13, 15 United States v. Davis, 332 F.3d 1163 (9th Cir. 2003) .................................................................................................12 United States v. Ghailani, 743 F. Supp. 2d 242 (S.D.N.Y. 2010) ................................................................................13, 15 United States v. Giordano, 440 F.2d 449 (6th Cir. 1971) ...............................................................................................3, 10 United States v. Hooten, 662 F.2d 628 (9th Cir. 1981) ...................................................................................................14 United States v. Huss, 482 F.2d 38 (2d Cir. 1973).........................................................................................................9 Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 3 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB United States v. Leonardi, 623 F.2d 746 (7th Cir. 1980) ...................................................................................................14 United States v. Polizzi, 500 F.2d 856 (9th Cir. 1974) ...........................................................................................3, 4, 11 United States v. Ramirez-Sandoval, 872 F.2d 1392 (9th Cir. 1989) ...........................................................................................13, 14 United States v. Seale, 461 F.2d 345 (7th Cir. 1972) ...................................................................................................10 United States v. Shetler, 665 F.3d 1150 (9th Cir. 2011) ...........................................................................................14, 15 OTHER AUTHORITIES 2 Law of Electronic Surveillance § 6:51..........................................................................................3 Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 4 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB I. SUMMARY OF ARGUMENT The Government now claims that 218 hours of illegal recordings, which FBI agents believed were “gold,” “important,” and “incriminating” at the time they were made, and many of which the Government identified in May 2015 as among the exhibits it intends to use at trial, yielded absolutely no investigative leads, additional subjects, or new evidence. 2/29 Tr. at 65:13-67:3, 106:17-25; Def. Exs. 14-15. The Government asks us to believe this even though it admits that the illegal recordings were shown to counsel for alleged conspirators in an effort to convince them to plead guilty, played during or made available prior to witness interviews, and reviewed and analyzed by FBI Agents Wynar and Bond. And just two days ago, the Government disclosed for the first time that Antitrust Division attorneys and paralegals created various internal notes and memos referencing the illegal recordings. Defendants are skeptical of the Government’s claims that the illegal recordings led to no other evidence, and the Court should be as well. Such claims should be thoroughly scrutinized and tested in adversary proceedings. See Alderman v. United States, 394 U.S. 165, 185 (1969). In fact, the Government’s submission reveals that it does not know how the illegal recordings were used. One glaring example of the holes in the Government’s understanding is found on the face of Agent Wynar’s and Agent Bond’s Declarations. Neither Agent Bond nor Agent Wynar specifically recalls reviewing some of the illegal recordings cited in the Government’s brief and referenced in the FBI’s own records. This inconsistency is not surprising given the scope of the illegal recording scheme and the Government’s incomplete and unreliable documentation of its use of the recordings. The FBI illegally amassed 218 hours of conversations over nine months, but made no effort to segregate the stationary recordings from the consensual recordings-in fact there was “no real distinction in [the agents’] minds between the two.” 2/29 Tr. at 191:10-15 (emphasis added). Two of the illegal recordings were mislabeled internally until 2016. Agent Wynar only “sometimes” reported on what he learned listening to “most if not all” of the illegal recordings, Dkt. 164-26, ¶¶ 23, 26, and some of the FBI’s transcripts and notes do not even indicate which recordings were reviewed to create them. Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 5 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB In light of the glaring deficiencies in its documentation of the use of the illegal recordings, the Government cannot establish that it did not derive any evidence from them. Because the Government cannot establish that it did not derive any evidence from the illegal recordings, the Court should suppress all of the evidence collected after the illegal recording scheme began on December 22, 2009. The only alternative is for the Government to specifically identify the evidence that it will seek to introduce at trial and establish an independent source for each item. If the Government is allowed to attempt to make such a showing, Defendants must be permitted to test the Government’s representations. The Court should (1) order the Government to specifically identify how its evidence was obtained, (2) order the Government to produce any materials not yet disclosed relating to the use of any illegal recording by any government agent, (3) set a hearing date for cross-examination of Agent Wynar, Agent Bond, and the prosecutors who investigated the case, and (4) order the Government to produce evidence establishing that the cooperating witnesses whose counsel were shown illegal recordings during plea negotiations were not induced to testify as a result. In an attempt to obtain the information necessary to evaluate the Government’s claims, Defendants met and conferred with the Government on September 16, 2016, and requested the opportunity to examine the Government’s agents either informally or in court. Bauer Decl., ¶ 4. Defendants followed up with a meet-and-confer letter on September 21, 2016, requesting documents such as records underlying Agent Bond’s and Agent Wynar’s assertions about their use of the illegal recordings and records relating to the use of the illegal recordings in meetings with cooperators and/or their counsel. See Bauer Decl., Ex. A (Sept. 21, 2016 letter). The Government responded to this letter on September 28, 2016. Bauer Decl., Ex. B (Sept. 28, 2016 letter). The Government refused to make any of its employees available for informal interviews. Id. at 5. Although the Government produced some of its records, it withheld others on the grounds that Defendants’ requests are overbroad and that the information sought is protected by various privileges. Id. at 1. The records that were produced confirm that it is unlikely that the Government could ever say with any reasonable certainty how, when, and by whom the illegal recordings were used. Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 6 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB It is well settled that Defendants are entitled to cross-examine the FBI agents and prosecutors who investigated the case regarding the connection between the illegal recordings and the evidence the Government intends to use at trial. See, e.g., Alderman, 394 U.S. at 185; United States v. Polizzi, 500 F.2d 856, 912-13 (9th Cir. 1974) (district court permitted the defense to examine prosecutors on the witness stand in an Alderman hearing); United States v. Giordano, 440 F.2d 449, 451 (6th Cir. 1971) (where the government’s records of electronic surveillance are incomplete, testimony of government agents may be necessary to assess taint); see also 2 Law of Electronic Surveillance § 6:51 (witnesses at a taint hearing may “includ[e], if necessary, prosecutors”). Defendants need to test Agent Wynar’s and Agent Bond’s claims that-although they kept recording for 218 hours, did not distinguish between stationary and consensual recordings, and only sometimes wrote down what they learned from their review of the recordings-nothing on the illegal recordings significantly directed the investigation. Defendants also need to question the attorneys who investigated this case regarding how they used the recordings. Plea negotiation meetings were not memorialized in 302s or paralegal write-ups, Bauer Decl., Ex. B (Sept. 28, 2016 letter) at 3, and Paralegal Specialist Susi drafted her declaration based on information provided by unidentified “government attorneys” who were “present during plea negotiation meetings and calls.” Dkt. 164-21, ¶ 6. Agent Wynar testified that information flowed freely between the FBI and the Antitrust Division attorneys, who “trusted [Wynar] to keep them informed” about the recordings. 2/11 Tr. at 98:6-14. And Antitrust Division attorneys and paralegals drafted various internal notes and memos referring to the illegal recordings. Bauer Decl., Ex. B (Sept. 28, 2016 letter) at 3. The Court should also require the Government to offer evidence sufficient to establish that the testimony of Rezaian and Rosenbledt, the cooperators whose counsel were shown illegal recordings during plea negotiations, was not induced by the illegal recordings. Witness testimony is tainted if it was induced by the fruits of an illegal search. See United States v. Ceccolini, 435 U.S. 268, 279 (1978). The Government claims that the role of the illegal recordings was minimal, but over twenty-five percent of the audio/video played for Rosenbledt’s counsel was from a stationary audio device. More importantly, only Rezaian and Rosenbledt can Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 7 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB say whether their cooperation was induced by the illegal recordings. The Government tried to obtain affidavits from them regarding the impact of the illegal recordings on their decisions to cooperate, but failed to do so. See Bauer Decl., Ex. B (Sept. 28, 2016 letter) at 4. The Government cannot satisfy its burden on taint because it failed to keep accurate and complete records regarding the use of the illegal recordings. The Court should therefore suppress all of the Government’s evidence collected after the illegal recording scheme began on December 22, 2009. In the alternative, if the Government is allowed to proceed by specifically identifying the evidence it intends to use at trial and attempting to establish an untainted chain for each item, Defendants are entitled to test the Government’s representations. The Court should set a hearing at which Agent Wynar, Agent Bond, and the prosecutors who participated in the investigation of the case will be available for cross-examination. Prior to that hearing, the Court should also order the Government to produce all records relating to the use of the illegal recordings that have not already been disclosed to the defense, and to offer evidence that the cooperators whose counsel were shown illegal recordings during plea negotiations were not induced to testify as a result. II. ARGUMENT A. The Government Cannot Satisfy Its Burden on Taint Because It Does Not Know How the Recordings Were Used. The Government has the ultimate burden to establish that none of its evidence is derived from the illegal recordings. Alderman, 394 U.S. at 183; see also Polizzi, 500 F.2d at 910. The Government cannot satisfy this burden here because the declarations and testimony of its agents and the records produced to date reveal that the Government failed to consistently, thoroughly, or accurately document its use of the illegal recordings. 1. The Declarations of Agent Wynar and Agent Bond Reveal Holes in the Government’s Submission. To support its broad assertion that the FBI never used the recordings “to direct the investigation, identify new subjects, develop new leads, or obtain any new evidence,” Dkt. 164 at 4, the Government offers the declarations of two FBI agents regarding their review of the Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 8 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB recordings. Special Agent Roahn Wynar, the “primary agent responsible for reviewing the stationary recordings,” Dkt. 164-26, ¶ 23, recalls reviewing only three stationary audio recordings during the investigation that he believed were potentially incriminating: 1D069.001_part3.wav, 1D143.001_part3.wav, and 1D233.001_part.wav. Id. ¶ 29. Special Agent Deborah Bond, the “lead case agent” who “infrequently” reviewed the recordings, Dkt. 164-1, ¶¶ 2, 4, recalls reviewing only three stationary audio recordings apart from what was played during plea negotiation meetings and witness interviews: 1D037.002_part4.wav, 1D069.001_part3.wav, and 1D143.001_part3.wav.1 Id. ¶ 8. The basis for these declarations is not clear. It is unlikely that, years later, Agent Wynar and Agent Bond recall from memory which of hundreds of file numbers they reviewed, but the Government has not specified the documents, if any, on which the agents may have relied. In fact, the Government’s own submission and its recent document productions indicate that the Wynar and Bond Declarations do not tell the whole story. Neither Agent Bond nor Agent Wynar specifically recalls reviewing some of the illegal recordings discussed in the Government’s brief and referenced in the FBI’s own records. 2. The Government’s Records Are Incomplete and Unreliable. The Government’s inability to say with any certainty how the recordings were used is not surprising given the scope of the illegal recording scheme and the failure to distinguish between stationary and consensual recordings in the case file. The Government illegally captured 218 hours2 of conversations on at least twenty-eight days over the course of ninth months. 2/29 Tr. at 156:11-15; 2/11 Tr. at 43:17-21, 47:3-20. The same devices were used to make stationary and consensual recordings. 2/11 Tr. at 218:12-18; Bauer Decl., Ex. B (Sept. 28, 2016 letter) at 4. The FBI made no effort to segregate the stationary recordings from the consensual recordings in the case file. Agent Wynar was clear that there was “no special isolation” of the stationary 1 1D143.001_part3.wav was in fact played during a plea negotiation meeting. Dkt. 164-21, ¶ 17. 2 Agent Wynar previously testified that the FBI illegally amassed 214 hours of conversations. 2/29 Tr. at 156:11-15. Since that testimony, the Government has admitted that an additional recording with file number 1D052 is also an illegal recording, see Dkt. 144 at 6 n.2, bringing the total number of hours of illegal recordings to 218. See Bauer Decl., ¶ 14. Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 9 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB recordings, 2/29 Tr. at 190:14-191:2, that the case “library” was a “combination of the consensual and the nonconsensual electronic surveillance,” id. at 191:3-9, and that “[t]here was no real distinction in [the agents’] minds” between the stationary recordings and the consensual recordings, id. at 191:10-15 (emphasis added). With hundreds of hours of illegal and consensual recordings mixed up in a single vault, it is unlikely that the Government could ever credibly represent that it knows when and how each illegal recording was used in the investigation. Consistent with the lack of segregation in the case file, at least two illegal recordings were mislabeled until 2016-over six years after the recording scheme began. On February 8, 2016, just three days before the first suppression hearing, the Government disclosed for the first time that in addition to the sprinkler box, planter box, and vehicle devices, the FBI had planted a recording device in a backpack and left the backpack unattended at the auction. Def. Ex. 7. The backpack recording had been “mislabeled” and “that mislabeling perpetuated itself for the duration of the investigation.” 2/11 Tr. at 116:3-19. Agent Wynar, the person responsible for the illegal recordings, could not remember the day on which the backpack device was used and could offer “no explanation” for the mislabeling. Id. at 116:11-19. Even more concerning is the fact that Defendants had to point out the existence of an additional illegal recording that the Government had “mislabeled internally” as a consensual recording. See Dkt. 136 at 20 n.13; Dkt. 144 at 6 n.2. The recording with file number 1D052 has several indicators that it is nonconsensual, but it was not included on the Government’s list of stationary recordings. Dkt. 136-1, ¶ 5; Def. Ex. 2. Defendants raised the possibility that 1D052 was an undisclosed stationary recording, and on June 17, 2016, the Government revealed for the first time that 1D052 was in fact “a stationary recording from January 14, 2010 that was mislabeled internally as a consensual recording.” Dkt. 136 at 20 n.13; Dkt. 144 at 6 n.2. If illegal recordings were mislabeled in the Government’s case file, agents and attorneys may have listened to and learned from those recordings without realizing what they were listening to. That makes it impossible for the Government to definitively state that it did not derive any evidence from the illegal recordings. Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 10 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB As the Court recognized in its August 1, 2016 Order, see Dkt. 150 at 8-9, the FBI’s documentation of its review of the recordings is generally unreliable. For example, an “FBI Rough-Draft Transcript” produced on September 16, 2016-a week after the Government filed its brief on taint-does not even indicate which recordings were reviewed, let alone by whom and when. See Bauer Decl., Ex. E (NDRE-FBI-0637). The index accompanying the production states that there are “various sources” for this transcript, “possibly including 1D563, 1D564, or 1D566.” Bauer Decl., Ex. D (Sept. 16, 2016 Production Index) (emphasis added). Neither Agent Wynar nor Agent Bond recalls reviewing 1D563, 1D564, or 1D566, and 1D563 and 1D566 are not even mentioned in the Government’s submission. In addition, just two days ago, the Government produced Agent Wynar’s notes about the Penhurst auction, which are based on “audio transcripts, video recordings, and CHS interviews” and which “may refer to both consensual and stationary recordings.” Bauer Decl., Ex. B (Sept. 28, 2016 letter) at 2 (emphasis added). The Government also disclosed that Agent Bond may have edited two of the transcripts of the illegal recordings, and that cooperator Mike Navone may have been shown a PowerPoint presentation containing audio/video during a plea negotiation meeting. Id. at 2-3. Defendants and the Court simply cannot rely on such inadequate recordkeeping to determine whether the extensive illegal electronic surveillance directed the Government’s investigation. Further, even if the Government’s records had the necessary information, its recordkeeping was not consistent. Agent Wynar reviewed “most if not all of the stationary recordings,” Dkt. 164-26, ¶ 23, but only “sometimes” wrote a FISUR report, id. ¶ 26; 2/11 Tr. at 178:1-15. He claims to have “typically” written a report if the recording contained “relevant” or “important” information. Dkt. 164-26, ¶ 26; 2/11 Tr. at 178:1-15. But Agent Wynar admits that what he considered relevant or important changed over time, see 2/29 Tr. at 65:13-67:3 (distinguishing between “what we viewed as incriminating at that time [of the recordings] and what we understand to be incriminating now”), meaning there was no clear distinction between recordings whose review would have been documented and those whose review would not have been. Moreover, the Government admits that Agent Wynar’s records contain errors. After Defendants pointed out that a report from February 12, 2010-not one of the dates on the Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 11 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB Government’s list of stationary recordings-is nearly identical to ten boilerplate reports that the Government admits discuss the use of stationary devices, the Government admitted that it “believes” the February 12 report contains “a typographical error” and actually corresponds to stationary recordings from February 16, 2010. See Dkt. 136 at 20 n.13; Dkt. 144 at 6 n.2. 3. Because the Government Does Not Know How the Recordings Were Used, the Court Should Suppress All Evidence Obtained After the Illegal Recording Scheme Began. The Government cannot establish that it did not derive any evidence from the illegal recordings because it failed to accurately and completely document how the recordings were used. The Court should therefore suppress all of the Government’s evidence collected after the illegal recording scheme commenced on December 22, 2009. Any other rule would reward the Government for its poor recordkeeping, allowing the FBI and the Antitrust Division to make illegal recordings and then claim that no evidence was derived from them because there are no records documenting each use of the illegally seized conversations. B. In the Alternative, the Government Must Specifically Identify the Evidence It Intends to Rely on at Trial and Produce the Records and Testimony Necessary to Establish that Its Evidence Is Untainted. The only alternative to suppression of all evidence collected after the illegal recording scheme began is for the Government to specifically identify the evidence that it intends to rely on at trial and to establish an untainted chain for each item. If the Government is allowed to proceed on that basis, Defendants and the Court must have access to the records and testimony necessary to scrutinize the Government’s representations. The Court should require the Government to produce any materials not already disclosed relating to the use of any illegal recording by any government agent, set a hearing date for cross-examination of the FBI agents and prosecutors who participated in the investigation of the case, and require the Government to produce evidence establishing that the cooperators whose counsel were shown illegal recordings during plea negotiations were not induced to testify as a result. Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 12 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB 1. The Government Must Produce All Materials Relating to the Use of the Illegal Recordings. Where the Government’s disclosures regarding illegal electronic surveillance are inaccurate or incomplete, the Government cannot cure its failure to maintain and produce the relevant records with unsupported assertions. Disclosure of the records relating to the use of the illegal recordings is critical because Defendants cannot be “left entirely to reliance on government testimony.” Alderman, 394 U.S. at 183; see also United States v. Huss, 482 F.2d 38, 50 n.9 (2d Cir. 1973) (refusing to accept the government’s “representations [about which agents listened to which recordings] in lieu of evidence” and holding that testimony was tainted). This is especially true where there is reason to believe that the Government does not actually know how the illegal recordings were used. Although the Government produced some of the records requested in Defendants’ September 21, 2016 letter, it continues to withhold records on the grounds that the requests are overbroad and that some of the information sought is protected by the law enforcement privilege, the deliberative process privilege, and the work-product doctrine. Bauer Decl., Ex. B (Sept. 28, 2016 letter) at 1. Defendants requested a privilege log from the Government on September 30, 2016, and the meet-and-confer process is ongoing. Bauer Decl., Ex. C (Sept. 30, 2016 letter). Defendants maintain that all records relating to the use of the illegal recordings are necessary to substantiate the Government’s sweeping claims of non-use. The privileges and protections cited by the Government are not absolute. See Greenpeace v. Nat’l Marine Fisheries Serv., 198 F.R.D. 540, 543 (D. Nev. 2000) (deliberative process privilege is “narrowly construed” and “not absolute”; the court “must determine whether the need for the evidence overrides the government’s interest in non-disclosure”); Hemstreet v. Duncan, No. CV-07-732-ST, 2007 WL 4287602, at *2 (D. Or. Dec. 4, 2007) (where records are “relevant and essential” to resolution of the case, the law enforcement privilege is overcome); Moreno v. Autozone, Inc., No. C-05-4432 CRB (EMC), 2008 WL 906510, at *1 (N.D. Cal. Apr. 1, 2008) (work-product protection is “qualified” and may be overcome upon a showing of “substantial need”). Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 13 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB 2. Defendants Are Entitled to Cross-Examine the FBI Agents and Government Attorneys Who Investigated this Case. It is well settled that a defendant has “the right to cross-examine the appropriate officials in regard to the connection between [records of overheard conversations] and the case made against him.” Alderman, 394 U.S. at 185. Cross-examination is essential to test the Government’s representations regarding its use of illegally obtained evidence. See, e.g., United States v. Seale, 461 F.2d 345, 365 (7th Cir. 1972) (“[S]worn testimony, subject to cross- examination, of relevant Government witnesses must be submitted . . . to show lack of taint.”); Giordano, 440 F.2d at 450 (“[T]he Government must produce the federal agents responsible for investigating the case, so that the defendant may cross-examine them concerning the extent of dissemination.”). A defendant should therefore be afforded “ample opportunity . . . to probe the source” of potentially tainted evidence, including by “intensive cross-examination” of FBI agents and prosecutors. Baker v. United States, 430 F.2d 499, 500-02 (D.C. Cir. 1970). Here, Defendants are entitled to cross-examine Agent Wynar, Agent Bond, and any other government agent who reviewed or was told about any of the illegal recordings. It is critical to test Wynar’s and Bond’s Declarations because there was “no real distinction in [their] minds” between the stationary recordings and the consensual recordings during the investigation. 2/29 Tr. at 191:10-15 (emphasis added). The illegal recording scheme continued for nine months, capturing 218 hours of stationary recordings and over a thousand hours of consensual recordings, with “no special isolation” of the stationary material. Id. at 190:14-191:2. At least two of the illegal recordings were mislabeled internally until 2016, and the agents’ documentation of their review of the recordings is incomplete and unreliable. See supra Section II.A. Yet both Agent Wynar and Agent Bond have represented that nothing they learned from the illegal recordings ever directed the investigation in any significant way. Agent Bond somehow makes this representation even though she cannot recall, not even approximately, when she reviewed two of the three illegal recordings that she remembers listening to. Dkt. 164-1, ¶¶ 15, 17. Defendants must be permitted to probe these claims. Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 14 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB Defendants are also entitled to cross-examine the prosecutors who investigated this case. Courts allow defendants to cross-examine prosecutors at taint hearings where there is reason to believe the prosecutors may have received information derived from the illegal search. See, e.g., Polizzi, 500 F.2d at 912-13 (district court ordered the government to provide the defendants with the names of all prosecutors so that the defendants could ask each prosecutor on the witness stand whether he or she had received any information about the unlawful wiretap); Baker, 430 F.2d at 500 (defendant allowed to conduct “intensive cross-examination” of trial attorneys, IRS agents, and FBI agents). Here, many of the lead Government attorneys on the investigation at the time that the illegal recordings were made and prior to indictment no longer work for the Government, Bauer Decl., ¶ 15, and the Government has provided almost no information regarding which, if any, Government attorneys reviewed the illegal recordings and when. The information that is available strongly suggests that the prosecutors reviewed the illegal recordings. In April 2010, Agent Wynar brought illegal recordings and information derived from them when he approached prosecutors seeking a Title III warrant for Rezaian’s phone. 2/29 Tr. at 105:5-10; 2/11 Tr. at 77:4-8; Dkt. 164-26, ¶ 40. Since November 2011, the Antitrust Division has had its own copies of the illegal recordings. Bauer Decl., Ex. B (Sept. 28, 2016 letter) at 3. More generally, information flowed freely between the prosecutors and the FBI agents: “The Antitrust Division is a very, very active participant in these cases,” 2/11 Tr. at 95:11-25, and at least in the period leading up to the illegal recording scheme, “[t]here was a lot of information flowing between case agents and the prosecutors,” id. at 96:2-9, who would “interact[] on a daily basis face to face,” id. at 97:4-9. The prosecutors approved the recording program, id. at 96:15-20, and “trusted [Wynar] to keep them informed about what [he] was doing,” id. at 98:6-14. This frequent exchange of information warrants cross-examination of the prosecutors regarding whether they were shown or told about the contents of the illegal recordings. Indeed, various Antitrust Division notes and memos refer to the illegal recordings. Bauer Decl., Ex. B (Sept. 28, 2016 letter) at 3. Further, the prosecutors would have attended the plea negotiation meetings and witness interviews during which the Government admits illegal recordings were played. Cross- Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 15 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB examination of the prosecutors is essential because plea negotiation meetings were not memorialized in 302s or paralegal write-ups. Id. Further, Paralegal Specialist Susi based her declaration on “information provided by” unidentified “government attorneys” who were “present during plea negotiation meetings and calls.” Dkt. 164-21, ¶ 6. Agent Bond testified that she did not know whether stationary recordings were played during plea negotiations, but she could find out by “talk[ing] to the attorneys,” who may have taken notes during the meetings. 2/29 Tr. at 231:5-16. And the Government has produced four transcripts of illegal recordings prepared by DOJ, three of which were prepared just before the witness interviews at which they were shown and one of which was prepared in December 2012, long before indictment. See Bauer Decl., Exs. D (Sept. 16, 2016 Production Index), F (NDRE-DOJ-000223), G (NDRE- DOJ-000232), H (NDRE-DOJ-000233), and I (NDRE-DOJ-000235). The Court does not have to accept the second-hand knowledge of a paralegal and the broad, unsupported statements in the Government’s brief; Defendants are entitled to cross-examine the prosecutors themselves, who surely reviewed or received information from the illegal recordings. 3. The Government Must Produce Evidence Establishing that the Testimony of Cooperators Whose Counsel Were Shown Illegal Recordings During Plea Negotiations Is Untainted. The Government admits that counsel for two cooperators were shown illegal recordings during plea negotiations: Rezaian’s counsel was shown a clip of 1D151.002.avi, and Rosenbledt’s counsel was shown clips of 1D151.002.avi and 1D143.001_part3.wav. Dkt. 164- 21, ¶¶ 7, 15, 17. Courts have long held that witness testimony is tainted if it was induced by the fruits of an illegal search. See Ceccolini, 435 U.S. at 279; United States v. Davis, 332 F.3d 1163, 1171 (9th Cir. 2003). Here, the Government must offer evidence-not unsupported assertions- that the testimony of Rezaian and Rosenbledt was not induced by the illegal recordings. As a preliminary matter, the fact that counsel for Rezaian and Rosenbledt, rather than Rezaian and Rosenbledt themselves, were shown the illegal recordings makes no difference. That is because a client “is considered to have notice of all facts, notice of which can be charged upon the attorney,” Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 397 (1993) (citations omitted), and “the knowledge of [the client’s] underlying attorney[] is imputed Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 16 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB to [the client] as a matter of law,” Matsuura v. E.I. du Pont de Nemours & Co., 330 F. Supp. 2d 1101, 1107 n.11 (D. Haw. 2004), rev’d on other grounds, 431 F.3d 353 (9th Cir. 2005). The Government must show that the recordings played for attorneys during plea negotiations did not affect any cooperator’s decision to plead guilty. On the merits, the Government misapplies the Ceccolini factors. The first factor asks whether the testimony of the witness was “an act of [his] own free will in no way coerced or even induced by official authority as a result of” the illegal search. United States v. Ramirez- Sandoval, 872 F.2d 1392, 1397 (9th Cir. 1989). The Government claims that, because Rezaian and Rosenbledt agreed to plead guilty and the Court found their pleas knowing and voluntary, the first factor counsels against suppression. Dkt. 164 at 17. Not so. Given that Rezaian and Rosenbledt were unaware that the Government violated the Fourth Amendment and Title III to build the case against them, there is now a serious question whether their pleas were knowing. More importantly, only Rezaian and Rosenbledt can say whether their pleas were induced by the illegal recordings. The Government claims that the role of the illegal recordings was “minimal,” id., yet over twenty-five percent of the audio/video played for Rosenbledt’s counsel was from a stationary audio device. See Dkt. 164-21, ¶¶ 15, 17, 19 (0:22 + 1:30, of 7:07 total). The Government tried and failed to obtain affidavits from Rezaian and Rosenbledt stating that their cooperation was not induced by the illegal recordings. Bauer Decl., Ex. B (Sept. 28, 2016 letter) at 4. Given that failure, it seems unlikely that the Government could ever meet its burden to offer evidence establishing that its witnesses’ cooperation was not induced by the illegal recordings. See United States v. Ailemen, 43 F. App’x 77, 82 (9th Cir. 2002) (relying on a witness’ declaration to determine whether her testimony was induced by evidence obtained via an illegal wiretap); United States v. Ghailani, 743 F. Supp. 2d 242, 259-61 (S.D.N.Y. 2010) (pointing to the government’s failure to produce an affidavit from an allegedly tainted witness and ordering an evidentiary hearing at which the government could produce the witness). The second Ceccolini factor asks whether the illegally seized evidence was used in questioning the witness. Ramirez-Sandoval, 872 F.2d at 1397. Here, the answer is clearly yes. Unlike the Hooten case cited in the Government’s brief, in which the agents did not use the Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 17 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB illegally seized evidence to refresh any witness’ recollection or to pressure any witness to make a statement, counsel for Rosenbledt and Rezaian reviewed the illegal recordings. See United States v. Hooten, 662 F.2d 628, 632 (9th Cir. 1981). And unlike the Leonardi case, the recordings shown to Rezaian and Rosenbledt directly implicate them in the alleged conspiracy. Cf. United States v. Leonardi, 623 F.2d 746, 752 (7th Cir. 1980) (witness was confronted with his illegally seized driver’s license and social security card), with Dkt. 164-21, Ex. J (Rosenbledt was confronted with 1D143.001_part3.wav, a conversation during which Rosenbledt states, “I paid Ray,” and Rezaian states, “Pay Patrick. Dan, Ray, Mo. 2000. Lynbrook.”). Also unlike Leonardi, Rosenbledt and Rezaian were not facing substantial jail time relating to other offenses when they were confronted with the illegal recordings. See Leonardi, 623 F.2d at 753. The remaining three factors are neutral, at least on the current record. The third factor asks whether substantial time elapsed between the unlawful search and the initial contact with the witness. Ramirez-Sandoval, 872 F.2d at 1397. Although several years passed between the end of the illegal recording program and the Rosenbledt and Rezaian plea negotiation meetings, there is no indication that the passage of time weakened the connection between review of the illegal recordings and the witnesses’ decisions to cooperate. See United States v. Shetler, 665 F.3d 1150, 1159 (9th Cir. 2011). Moreover, finding no taint any time law enforcement waits to approach a witness would incentivize agents to conduct illegal searches, knowing they could use the fruits with potential cooperators as long as they waited some period of time. The fourth factors asks whether the identity of the defendant and the witness were known to the authorities before the illegal search. Ramirez-Sandoval, 872 F.2d at 1397. While true in this case,3 it is probably true in many cases, especially more complex and lengthy investigations. Finally, the fifth factor asks whether there is evidence to suggest that the agents initiated the illegal search with the goal of finding a willing and knowledgeable witness to testify. Id. The issue is not, as the Government believes, whether Agent Wynar consulted attorneys before setting up the illegal 3 The Government admits that Defendants Farag and Appenrodt were not known before the illegal recordings commenced, but contends that they were identified through lawful means. Dkt. 164-26, ¶¶ 16(d)-(e). Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 18 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB recording devices outside the courthouse. See Dkt. 164 at 18. Rather, this factor focuses on the goal of the agents in conducting the illegal search. See Shetler, 665 F.3d at 1160 (holding that a statement is more likely to be tainted when the goal of the illegal search was “purposeful extraction of evidence”). Here, the FBI set up electronic recording devices to “capture additional evidence” of alleged bid-rigging and fraud, and surely “additional evidence” may have included witness testimony. Def. Ex. 6, ¶ 7. The core question under Ceccolini is whether the testimony of the witnesses was induced by the illegal recordings. Without offering evidence from Rezaian and Rosenbledt themselves, the Government cannot satisfy its burden of proving that their cooperation was not induced by the illegal recordings. See Ghailani, 743 F. Supp. 2d at 261 (ordering an evidentiary hearing, at which the government could produce the potentially tainted witness). III. CONCLUSION For the foregoing reasons, Defendants respectfully request that the Court suppress all evidence collected after the illegal recording scheme began on December 22, 2009, because the Government failed to accurately and completely document its use of the illegal recordings and therefore cannot meet its burden. In the alternative, Defendants respectfully request that the Court order the following: (1) the Government must specifically identify the evidence that it intends to rely on at trial and establish an untainted chain for each item; (2) the Government must produce all materials not yet disclosed to the defense relating to the use of any illegal recording by any government agent; (3) set a hearing at which Agent Wynar, Agent Bond, and the prosecutors who participated in the investigation of this case will be available for cross- examination; and (4) the Government must produce evidence establishing that the testimony of Rezaian and Rosenbledt was not induced by the illegal recordings. // // // // // Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 19 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB DATED: September 30, 2016 Respectfully submitted, By /s/ Ashley M. Bauer Daniel M. Wall (Bar No. 102580) Ashley M. Bauer (Bar No. 231626) Alicia R. Jovais (Bar No. 296172) LATHAM & WATKINS LLP 505 Montgomery Street, Suite 2000 San Francisco, CA 94111-6538 Telephone: (415) 391-0600 Fax: (415) 395-8095 dan.wall@lw.com ashley.bauer@lw.com alicia.jovais@lw.com Attorneys for Defendant Abraham S. Farag By /s/ Matthew J. Jacobs Matthew J. Jacobs (Bar No. 171149) VINSON & ELKINS LLP 525 Market Street, Suite 2750 San Francisco, CA 94105 Telephone: (415) 979-6990 Fax: (415) 651-8786 mjacobs@velaw.com Attorney for Defendant Joseph J. Giraudo By /s/ Louis P. Feuchtbaum Louis P. Feuchtbaum (Bar No. 219826) SIDEMAN & BANCROFT LLP 1 Embarcadero Center, 22nd Floor San Francisco, CA 94111 Telephone: (415) 392-1960 Fax: (415) 392-0827 lfeuchtbaum@sideman.com Attorney for Defendant Raymond A. Grinsell // // // // // Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 20 of 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 ATTORNEYS AT LAW SAN FRANCISCO DEFS.’ RESPONSE TO GOVERNMENT’S BRIEF RE: USE OF RECORDINGS CASE NO. CR 14-00534-CRB By /s/ Nanci Clarence Nanci Clarence (Bar No. 122286) CLARENCE DYER & COHEN LLP 899 Ellis Street San Francisco, CA 94109 Telephone: (415) 749-1800 Fax: (415) 749-1694 nclarence@clarencedyer.com Attorney for Defendant Raymond A. Grinsell By /s/ Doron Weinberg Doron Weinberg (Bar No. 46131) LAW OFFICES OF DORON WEINBERG 523 Octavia Street San Francisco, CA 94102 Telephone: (415) 431-3472 Fax: (415) 552-2703 doronweinberg@aol.com Attorney for Defendant Kevin B. Cullinane By /s/ Jeffrey L. Bornstein Jeffrey L. Bornstein (Bar No. 99358) ROSEN BIEN GALVAN & GRUNFELD LLP 50 Fremont Street, Floor 19 San Francisco, CA 94105 Telephone: (415) 433-6830 Fax: (415) 433-7104 jbornstein@rbgg.com Attorney for Defendant James F. Appenrodt CIVIL LOCAL RULE 5-1(i)(3) Pursuant to Civil Local Rule 5-1(i)(3), I attest that concurrence in the filing of this document has been obtained from each of the other Signatories hereto. /s/ Ashley M. Bauer Ashley M. Bauer Attorney for Defendant Abraham S. Farag Case 3:14-cr-00534-CRB Document 170 Filed 09/30/16 Page 21 of 21