Six defense lawyers must comply with grand jury subpoenas for their billing records — but not until resolution of the underlying charges against their clients.
The March 21 ruling in In re Grand Jury Subpoena, A-5123-11, affirmed the denial of a motion to quash but said forcing the lawyers to comply while the charges are pending could create a conflict and chill the attorney-client relationship.
The lawyers subpoenaed were among those representing 34 people charged in a May 14, 2010, indictment with racketeering and conspiracy in connection with an alleged $2.2 billion international gambling enterprise. The alleged crimes included theft, forgery, money laundering and firearms offenses.
The subpoenas, issued in May 2011, sought fee records from the indictment date through the return date, including payment ledgers, bank deposit slips, canceled checks or money orders, payment receipts, and currency transaction reports and tax forms required for any payments over $10,000.
The Division of Criminal Justice served the subpoenas in June 2011, claiming they were part of a separate money-laundering investigation launched on May 24, 2010, 10 days after the racketeering indictment.
Some lawyers moved to quash on the ground that the subpoenas’ real purpose was to gather evidence on the charges already filed.
In denying the motion on April 20, 2012, Mercer County Superior Court Judge Pedro Jimenez found the subpoenas valid because they were directed at activities outside the time frame of the May 2010 indictment. He also held the billing records were not privileged.
Appellate Division Judges Joseph Yannotti and Jonathan Harris affirmed, saying the indictment and the subsequent money-laundering investigation "represent separate spheres of inquiry" and the fee records could not "buttress" an already returned indictment.
"A defendant cannot be immunized from future scrutiny of a similar offense just because he or she has already been charged with the prior misconduct. Nor can the involvement of an attorney — unwitting or otherwise — automatically shield possible wrongdoing," the judges held per curiam.
The defense lawyers claimed that the prosecution indicated back in November 2009 — prior to the racketeering indictment — that they were interested in the billing records.
But for the appeals court the date that mattered was the date the subpoena was issued, after the indictment.
The panel cautioned that the "fruits, if any, of the subpoenas cannot be used in the prosecution of the already-pending indictment," adding, "we discern no misconduct by the State as long as it hews to this limitation."
The judges saw no infringement of attorney-client privilege.
The data sought by the subpoenas — "narrowly tailored to non-communicative, non-confidential attributes of the parties’ business relationship — neither invade the attorney-client privilege nor erode the protections available to indigent and non-indigent defendants alike," they wrote.
But the judges did find that the lawyers and the Association of Criminal Defense Lawyers of New Jersey, an amicus, raised "legitimate alarms about a deleterious inhibiting effect upon the relationship between appellants and their indicted clients."
Those alarms, which tipped the scale "in favor of caution," were based on the similarity between the charges in the indictment and those being investigated and on the state’s "broad-stroke-approach" in subpoenaing all defense counsel.
Yannotti and Harris referred to "the disquiet and incongruity engendered by having the all of the indicted defendants’ private defense attorneys potentially called as grand jury witnesses against their clients, albeit in a subsequent proceeding."
The ACDL-NJ emphasized the conflict between the lawyers, who want to avoid potential contempt sanctions by complying, and their clients, whose interest in lessening the likelihood of being indicted on additional charges "would require the lawyer to do his or her utmost, including incurring contempt citations, to resist the subpoena."
What Yannotti and Harris deemed most relevant was that every lawyer got a subpoena, which "indubitably raises concerns of fairness and the potential for both misunderstanding by, and intimidation of, defense counsel and their clients" and a potential violation of the right to counsel.
Staying execution of the subpoenas would address those concerns, in their view.
ACDL-NJ lawyer Henry Klingeman, of Krovatin Klingeman in Newark, says "the judges did what we asked, to delay enforcement," so the lawyers would not feel pressured to comply with legal duties that might be at odds with their clients’ interests.
New Jersey prosecutors have traditionally not gone after fee records, says Klingeman, and he sees the move to do so in this case as an attack on the collegiality of the bar.
His brief asked for protocols to govern the area. Klingeman acknowledges that fee records are "fair game" but said "there ought to be some rules and some input from the defense bar. We have a real interest, a client interest and a self-interest, that needs to be recognized and addressed."
The subpoenaed lawyers are Robert Blossner of New York, Thomas Cataldo of Morris Plains, Paul Chiaramonte of Congers, N.Y., Murray and Stacey Richman, a father-daughter team from the Bronx, and John Weichsel of Hackensack
Vik Pawar of New York, Blossner’s law partner and the attorney for the six lawyers, was also hoping for protocols, like those that govern federal subpoenas.
The subpoenas were issued without oversight and "just didn’t smell right," he adds.
Says Weichsel: "I don’t think any criminal defense attorney would be pleased to have their fee records exposed or be happy with the prospect of some court, after the entire case is over, ordering the attorney to disgorge his fee because it came from alleged tainted money."
Peter Aseltine, a spokesman for the Division of Criminal Justice, says the office is considering its options.
None of the indicted charges have yet been tried.
The case is on hold pending a decision by the New Jersey Supreme Court on whether prosecutors can obtain the public defender application form filled out by one of the defendants, Alphonso "Tic" Cataldo of Florham Park.
Morris County Superior Court Judge Thomas Manahan quashed a subpoena for the records and was upheld on appeal in May 31, 2011. The Supreme Court heard oral argument in the case, In the Matter of Subpoena Duces Tecum on Custodian of Records, A-25-11, last Oct. 11.