Bob: According to Al Murray, Steve Trott was asked by Dave Queen to call Ken Fletcher, the Chief Postal Inspector (245-5445) to request that the Postal Service maintain their level of commitment on the Hutton case during the period that the grand jury will be extended. Apparently the regional inspector in Philadelphia has said he wants to pull the team off until the case is indicted. I'm not sure we need to remind Steve to do something, but Murray has asked that we inquire as to whether Steve has spoken with Fletcher. Since you have had the contact with Steve on Hutton, it might be better if you asked him. I'll be in Harrisburg on Friday, and will file the motion to extend the grand jury's term. If you speak with Steve, please let me know the result so I can tell Murray and Queen. Personal attention has been given this case at Harrisburg, PA; Scranton, PA; ew York, NY; and Washington, DC on a continuous basis since submission of the preliminary report dated October 10, 1984. Basis for the case was a report dated arch 19, 1932, sent to the Postal Inspector in Charge, Philadelphia, PA, by Joseph Nodla, an Examiner for the Federal Deposit Insurance Corporation, reporting an alleged check kiting scheme involving the E. F. Hutton Company, Inc., using an account at the United Penn Dank, Wilkes Carre, PA, among others. 2. As indicated in the latest preliminary report, the grand jury was scheduled to expire on November 21, 1984. During the weekend of November 11 and 12, 1984, Postal Inspectors J. C. Conroy and the undersigned assisted AUSA Albert R. Hurray, Jr. in preparing a firal draft copy of an indictment which was to be presented to the grand jury prior to its expiration. However, at the request of the Department of Justice, an indictment was not presented to the grand jury since the company and the targeted suspects had requested permission to speak directly with the Department of Justice prior to the Fresentation of an indictment. As requested by the Department of Justice, an extension of the grand jury for a period of six months was obtained from the Honorable Sylvia Rambo, Federal Judge, Harrisburg, PA. Attorneys for the Company were requested to make written submissions to the Department of Bustice after which a decision would be rendered. Beginning in lovember of 1994, the company hegan providing submissions to the Department of Justice, copies of which were presented to AUSA Murray. During the months of November and December, the company presented a total of five written submissions to the Department of Justice, as well as three written submissions on individual targets. The submissions were reviewed and found to contain little information of merit and a lot of misstatements of fact as well as half-truths. The submissions were critiqued by AUSA Murray and Postal Inspectors and the critiques were presented to the Department of Justice. 3. On January 7, 1985, a meeting was held at the Department of Justice in Washington, DC. Present at the meeting were Mr. Stephen Trott, Chief, Criminal Division; Mr. Robert Ogren, Chief, Fraud Section, Mr. Peter Clark, Trial Attorney, Fraud Section; Albert R. Murray, Jr., AUSA, Middle District of Pennsylvania; Mr. William G. Hundley, Hundley and Cacheris, Law Firm; Thomas F. Curnin and Thomas J. Kavaler; Attorneys, Cahill, Gordon and Reindel, Law Firm; J. Clayton Undercofler, III, Attorney, Dilworth, Paxson, Kalish and Kaufman, Law Firm; and Thomas Fitzpatrick, Attorney, as well as Inspector in Charge Thomas J. Dagley and the undersigned. The purpose of this meeting was to give the attorneys for the company, i.e., Hundley, Curnin, Kavaler, Undercofler and Fitzpatrick, the opportunity to make an oral presentation in addition to their written submissions. The meeting lasted for approximately 2 1/2 hours, after which the attorneys for the company were advised that a decision would be rendered and provided them after the prosecution team caucused. It became apparent after the meeting that the Department of Justice would authorize prosecution of at least the firm. Mr. Trott advised that due to the resignation of David Dart Queen as United States Attorney for the Middle District of Pennsylvania, Mr. Trott was taking over direct supervision of the prosecution of this case. He also advised that Mr. Murray would remain as lead counsel for the government. It was also decided that a decision relative to the culpability of individuals would be rendered after Mr. Ogren and Mr. Clark had occasion to review documents. 4. On two occasions during January and February of 1985, Mr. Clark and Mr. Ogren visited Division Headquarters in Harrisburg, PA for the purpose of reviewing documents relating to individuals' culpability in this case. While in Harrisburg on January 15 and 16, 1985, Mr. Ogren advised that the company would be notified the following week that it was to be indicted. He also advised that of the different fraudulent practices of the company that had been identified, the most appealing from a prosecutive standpoint were the chain link drawdowns, the purpose of which is the creation of float. Mr. Ogren requested additional investigative effort (charting) to further develop that aspect. Arrangements were made to identify and isolate approximately twenty horizontal drawdowns and six Postal Inspectors from the Eastern Region assisted Inspectors on this Task Force in charting approximately 190 months of activity. 5. Mr. Clark and Mr Ogren returned to Harrisburg on February 7 and 8, 1985 to continue reviewing documents relating to individuals' culpability. Upon completion of this review, Mr. Ogren was satisfied that sufficient evidence existed for indicting individuals as well as -the-corporation. Mr. Ogren also determined that the activities of the company throughout the country should be charged in a conspiracy count in the indictment. This decision has necessitated verification of the charting previously done and will result in augmenting the Task Force with the individuals from the Eastern Region who previously assisted the Task Force in the original charting. It is estimated that two weeks will be required to complete this activity and that it will begin in Harrisburg on March 4, 1985. 6. At this point in time, there is one remaining project of major significance to be completed in this investigation. This project relates to document control. Over the past year, considerable effort was expended in inventorying the records in this investigation which number in the millions. An attempt was made at utilizing the 5520 System for inventorying and controlling the more significant of those documents. The effort was not successful. An article written by Barbara Nicastro, a Trial Attorney in the Fraud Section, Department of Justice, was recently obtained. In this article, Mrs. Nicastro explains a system she has developed for assistance in document control, retrieval and use at trial. The system she employs is a manual system for cases involving several hundred to several thousand records. The system employs a combination of numbers and letters affixed to documents which assist in not only identifying the particular document, but also locating the document, preparing witness lists, preparing trial exhibit lists and preparing source lists. Meetings have been held in Harrisburg, PA over the past two weeks for the purpose of devising a computerized system which will give us the same capability, i.e., document control, retrieval and use at trial. Inspector Raleigh Demby is in the process of writing a program based on information provided him by AUSA Murray and members of the Task Force. It is expected that the program will be available on March 6, 1985 and that beginning March 4, 1985, members of the Task Force, supplemented by Clerks from the Harrisburg Post Office, will begin a systematic inventory of all records which will be input into a system over the next several weeks. Inspector Demby advises that an IBM PC AT with a 40 megabyte drive will be required for this purpose. Attempts are being initiated immediately in locating a machine with that capability. Gli Hollan J. A. Holland Enclosed herein please find materials for Mr. Trott and Mr. David Dart Queen and myself have met with all targeted defendants and we are prepared to recommend prosecution against the individuals named in the Indictment. Happy New Year! ARM: jak P.S. Also, please find Grand Jury witness summaries which are for you only. 49-507 0-86--21 |