Source: https://casetext.com/case/us-v-salvagno-10
Timestamp: 2020-07-06 05:47:41
Document Index: 783646975

Matched Legal Cases: ['§ 1962', '§ 1512', '§ 1512', '§ 1956', '§ 2', '§ 1956', '§ 2', '§ 1956', '§ 2', '§ 7401', '§ 2601', '§ 7413', '§ 7206', '§ 1200', '§ 7']

U.S. v. Salvagno, 5:02-CR-51 (HGM) | Casetext Search + Citator
Full title:UNITED STATES OF AMERICA v. ALEXANDER SALVAGNO, RAUL SALVAGNO, and AAR…
Date published: Feb 28, 2002
5:02-CR-51 (HGM) (N.D.N.Y. Feb. 28, 2002)
5:02-CR-51 (HGM)
CRAIG A. BENEDICT, Assistant United States Attorney, HON. GLENN T. SUDDABY, United States Attorney Northern District of New York Syracuse, New York., for the United States of America.
DAVID BERNFELD, ESQ., SKOLNICK, HOCHBERG BERNFELD, P.C., New York, New York., JEFFREY L. BERNFELD, ESQ., New York, New York., For Alexander Salvagno and AAR CONTRACTOR, INC.
EMIL M. ROSSI, ESQ., Syracuse, New York., FOR RAUL SALVAGNO.
HOWARD G. MUNSON, Sr., United States District Judge
The Government has charged defendants Alexander Salvagno, Raul Salvagno, and their company, AAR Contractor, Inc., with various crimes stemming from their asbestos abatement business. Count One of the fourteen count Second Superceding Indictment charges defendants with thirty-three acts of racketeering in violation of 18 U.S.C. § 1962(d). Specifically, Count One sets forth a pattern of racketeering activity consisting of: (1) obstruction of justice, in violation of 18 U.S.C. § 1512(b)(2)(B) (racketeering act one); (2) obstruction of justice, in violation of 18 U.S.C. § 1512(b)(1) and (b)(3) (racketeering act two); (3) money laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)(i) and 18 U.S.C. § 2 (racketeering acts three through nine); (4) money laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)(i) and 18 U.S.C. § 2 (racketeering acts ten through fourteen); and, (5) money laundering, in violation of 18 U.S.C. § 1956(a)(1)(A)(i) and 18 U.S.C. § 2 (racketeering acts fifteen through thirty-three). Count Two charges defendants with conspiring to violate the Clean Air Act, 42 U.S.C. § 7401 et seq. and the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq. Counts Three through Eleven charge defendants with violating the Clean Air Act, 42 U.S.C. § 7413(c)(1) and (2). Counts Twelve through Fourteen charge Alexander Salvagno with filing a false Federal personal income tax return (Form 1040) in violation of 26 U.S.C. § 7206(1). See Dkt. No. 112, Second Superceding Indictment.
Defendants Alexander Salvagno and AAR Contractor, Inc. are represented by David B. Bernfeld, Esq. of Skolnick, Hochberg Bernfeld, P.C., and his son, Jeffrey L. Bernfeld, Esq. of DeMatteo Bernfeld LLP. Defendant Raul Salvagno is represented by Emil Rossi, Esq. Currently before the court are defendants' motion to adjourn the scheduled trial date for six weeks and the Government's motion to disqualify Jeffrey Bernfeld on the basis that a conflict of interest exists if he continues his representation of defendants. Defendants advance three principle arguments in opposition to the Government's motion: (1) that Jeffrey Bernfeld and his law partner, Joseph DeMatteo implemented screening measures that vitiate any conflict or appearance thereof; (2) that depriving defendants of Jeffrey Bernfeld's services would cause them great prejudice and unnecessarily interfere with their right to effective counsel; and, (3) that defendants have waived any actual or potential conflict. For reasons that follow below, defendants' motion to adjourn the trial is GRANTED, and the Government's motion to disqualify Jeffrey L. Bernfeld is GRANTED.
On February 18, 2003, the court conducted a conference in chambers during which counsel for all defendants requested an adjournment of the trial scheduled for March 3, 2003. The Government opposed this motion.
On January 16, 2001, prior to indicting defendants, the Government moved to disqualify Joseph DeMatteo, Jeffrey Bernfeld's current law partner, from representing ten separate targets of the investigation that led to the original Indictment and its two offspring. See Dkt. No. 93, Government's Am. Reply in Resp. to Opp'n to Disqualify at 3. In the early spring of 2000, at the behest of David Bernfeld, these targets hired DeMatteo. See Dkt. No. 81, Government's Mem. of Law in Supp. of Mot. to Disqualify at 2; see also Dkt. No. 89, DeMatteo Aff. at ¶ 3. The Government sought to disqualify DeMatteo asserting that his attempted representation of multiple targets in a single prosecution created an actual conflict of interest. See Dkt. No. 81, Government's Mem. of Law in Supp. of Mot. to Disqualify Ex. "1" at 2. Both DeMatteo and David Bernfeld consented to an Order of Disqualification, signed by the court on January 25, 2001, which prohibited DeMatteo from representing Michael Shanahan, Jerry Lindquist, Robert O'brey, Dallas Paul, Chris Brownwell, Dean Glover, Sergio Peretti, Kevin Burnham, William Marggi, and Kevin Pilgrim. In addition, the court's order warned DeMatteo of the potential conflict in his continued representation of three additional targets: Anthony Mongato and two companies, Twin Cities Environmental and American Manpower, which he operated. See Dkt. No. 81, Government's Mem. of Law in Supp. of Mot. to Disqualify at 2 and Ex. "4." After the court's order, DeMatteo discontinued his representation with respect to the ten targets, and the Government charged Shanahan, Lindquist, and O'brey with crimes in the above-captioned case; they subsequently pled guilty to the charges and are cooperating with the Government against defendants. See id. at 2. The Government received significant cooperation from the remaining seven targets such that it did not charge them. See id. Following the court's order of disqualification, DeMatteo continued in his representation of Mongato and his two companies. See id. By letter dated April 16, 2001, DeMatteo informed the Government that he had discontinued his representation of Mongato. See Dkt. No. 93, Government's Am. Reply in Resp. to Opp'n to Disqualify at 4 and Ex. "6." Therefore, thirteen of DeMatteo's former clients (seven unindicted co-conspirators and six cooperating co-defendants) have interests adverse from those of the remaining defendants.
In or about November 1999, defendants Alexander Salvagno and AAR Contractor, Inc., retained Jeffrey Bernfeld and his father David Bernfeld as co-counsel to represent them in this matter. See Dkt. No. 88, Jeffrey Bernfeld Aff. at ¶ 2. At that time and until April 1, 2001, Jeffrey Bernfeld operated as a solo practitioner out of his apartment/office at 25 Broad Street, New York, New York 10004. See id. at ¶ 3. On April 1, 2001, however, Joseph DeMatteo and Jeffrey Bernfeld formed DeMatteo Bernfeld, LLP for the purpose of practicing law. This partnership became fully integrated, financially and otherwise, on or about August 1, 2001. See Dkt. No. 87, Def.'s Mem. of Law in Opp'n to Mot. to Disqualify at 2. Since its inception, DeMatteo Bernfeld, LLP has operated out of offices located at 275 Madison Avenue, Suite 1000, New York, New York 10016-1110. See Dkt. No. 88, Jeffrey Bernfeld Aff. at ¶ 3.
The Government bases its motion to disqualify Jeffrey Bernfeld on the fact that the court previously disqualified his current law partner, DeMatteo. The Government contends that the court should disqualify Jeffrey Bernfeld because DeMatteo had access to attorney-client privileged information from co-defendants and unindicted co-conspirators now cooperating with the Government. The Government contends that DeMatteo's access to client secrets and confidences in this matter should preclude Jeffrey Bernfeld, as DeMatteo's law partner, from any further representation in this matter. See Dkt. No. 81, Government's Mem. of Law in Supp. of Mot. to Disqualify at 4. The Government contends that given the small size of DeMatteo's and Jeffrey Bernfeld's practice, it is not possible to avoid application of the imputed disqualification rule by "screening" DeMatteo from the case. See Dkt. No. 85, Government's Reply in Resp. to the Opp'n to Disqualify Jeffrey Bernfeld at 3. The Government submits that New York Law presumes that when a court disqualifies an attorney from undertaking subsequent representation in opposition to a former client, all the attorneys in that firm are likewise precluded from such representation. See Dkt. No. 93, Government's Am. Reply in Resp. to Opp'n to Disqualify at 7.
The Government intends to call cooperating co-defendants Mongato, Shanahan, O'brey and Lindquist to testify against defendants at trial. See Dkt. No. 81, Government's Mem. of Law in Supp. of Mot. to Disqualify at 4.
The Government submits, on information and belief, that DeMatteo and Jeffrey Bernfeld are the only two attorneys in their law firm. See Dkt. No. 81, Government's Mem. of Law in Supp. of Mot. to Disqualify at 5. Defendants have not contested this point.
Defendants counter that certain procedural and substantive safeguards that defense counsel implemented and the particular facts of the case demonstrate that the court need not disqualify Jeffrey Bernfeld. Defendants assert that DeMatteo Bernfeld, LLP has never represented any person or entity involved in this matter. See Dkt. No. 88, Jeffrey Bernfeld Aff. at ¶ 5. Jeffrey Bernfeld avers that he directs all of his billing on this matter to "Jeffrey L. Bernfeld, Attorney At Law" rather than DeMatteo Bernfeld, LLP. See Dkt. No. 88, Jeffrey Bernfeld Aff. at ¶ 5. Both Jeffrey Bernfeld and DeMatteo aver that DeMatteo's representation of the ten targets, consisting of seven unindicted co-conspirators and three co-defendants, ended in or about January 2001, and his representation of Mongato ended at or about the end of March or beginning of April 2001, before the inception of their partnership. See Dkt. No. 87, Def.'s Mem. of Law In Opp'n to Government's Mot. to Disqualify at 2; see also Dkt. No. 88, Jeffrey Bernfeld Aff. at ¶ 3; Dkt. No. 89, DeMatteo Aff. at ¶ 3.
Contrary to Jeffrey Bernfeld's assertion, while DeMatteo Bernfeld, LLP has never represented any person or entity involved in this matter, on the record it appears that DeMatteo represented Mongato during the infancy, but nevertheless after the inception, of DeMatteo Bernfeld, LLP. They formed DeMatteo Bernfeld, LLP, on April 1, 2001, and DeMatteo continued to represent Mongato at least until April 13, 2001, if not April 16, 2001. See Dkt. No. 93, Government's Am. Reply in Resp. to Opp'n to Disqualify at 4 and Ex. "6."
Defendants stress that prior to forming DeMatteo Bernfeld, LLP, both Jeffrey Bernfeld and DeMatteo were aware of the potential for conflict, or appearance thereof, in DeMatteo's representation of Mongato and his two companies, as well as his former representation of the ten additional targets, and Bernfeld's representation of Alexander Salvagno and AAR Contractor, Inc. Consequently, they implemented strict screening procedures and erected an absolute "Chinese Wall" between them with respect to all aspects of the case. See Dkt. No. 88, Jeffrey Bernfeld Aff. at ¶ 5; see also Dkt. No. 89, DeMatteo Aff. at ¶ 4. In accordance therewith, Jeffrey Bernfeld has continued to maintain all of his files and work product relating to the case at his home office, rather than at DeMatteo Bernfeld LLP's law office. See Dkt. No. 88, Jeffrey Bernfeld Aff. at ¶ 5; see also Dkt. No. 89, DeMatteo Aff. at ¶ 4. Similarly, DeMatteo has not maintained any files in connection with this matter at the office he and Jeffrey Bernfeld share in common. See Dkt. No. 88, Jeffrey Bernfeld Aff. at ¶ 5; see also Dkt. No. 89, DeMatteo Aff. at ¶ 4. Jeffrey Bernfeld and DeMatteo assert that they have been extremely careful not to discuss or disclose any client confidences from either side. See id. Jeffrey Bernfeld contends that the procedural and substantive safeguards he and DeMatteo have employed protect against any intrusion in to the attorney-client privilege area.
Jeffrey Bernfeld suggests that his disqualification from the case would prejudice his clients' rights, because, as co-counsel, he and his father David Bernfeld have split responsibilities for defending their clients. He notes that during his three-year involvement with the case, he has performed a substantial amount of work and has become intimately familiar with the facts, law, and circumstances of the case. He argues that were the court to disqualify him and thereby force defendants to retain new counsel, the time and cost necessary for new counsel to familiarize himself with the matter would be prohibitive. See Dkt. No. 88, Jeffrey Bernfeld Aff. at ¶ 7. He contends that depriving defendants of his services would cause them great prejudice and unnecessarily interfere with defendants' right to effective counsel. See id. at ¶ 9.
In addition, Jeffrey Bernfeld asserts that his clients, defendant Alexander Salvagno and his company AAR Contractors, Inc., strenuously oppose his disqualification. He represents that his clients understand the conflict issue raised by the Government in its motion to disqualify and have waived any actual or potential conflict arising out of DeMatteo's prior representation of Mongato, his companies, and the ten additional targets. See Dkt. No. 88, Jeffrey Bernfeld Aff. at ¶ 8. He also questions the timing of the Government's motion, for despite his active participation in the case since November 1999, prior to the Government's Motion to Disqualify, filed October 25, 2002, it had never objected to his representation in this matter. See id. at ¶ 9.
In its reply papers, the Government addresses certain issues raised by defendants. First, the Government denies that the timing of its motion to disqualify suggests a tactical or strategic motive. The Government avers that all contact it had with the defense was with David Bernfeld. See Dkt. No. 85, Government's Reply in Reps. to the Opp'n to Disqualify at 2. While the Government concedes that it was aware that David Bernfeld had obtained legal research assistance from Jeffrey Bernfeld, it knew of no plans for Jeffrey Bernfeld to formally represent any current defendant. See id. The Government submits that until it received defendants' pre-trial motions, it was unaware that Jeffrey Bernfeld formally or officially represented any defendants in the case. Consequently, the Government had no reason to challenge Jeffrey Bernfeld's representation, for it did not believe that such representation existed. See Dkt. No. 85, Government's Reply in Reps. to the Opp'n to Disqualify at 1-2.
Second, the Government implies that defendants' waiver of any conflict of interest is misleading, because the conflict is not theirs to waive. The Government emphasizes that the conflict involves privileges belonging to DeMatteo's former clients, and that such a conflict works to Jeffrey Bernfeld's clients' advantage and to the possible detriment of a fair trial for the people of the United States. See id. at 2. Each of DeMatteo's thirteen former clients involved in this matter, including cooperating co-defendants Mongato, Shanahan, O'brey, and Lindquist, have authorized the Government to represent that they do not waive any conflict of interest. Moreover, Mongato has advised and authorized the Government to represent that he joins in its motion to disqualify Jeffrey Bernfeld. See id. at 3.
DISCUSSION I. Trial Date
Defendants' motion to adjourn the trial is left to the discretion of the court. See United States v. Edwards, 101 F.3d 17, 19 (2d Cir. 1996). Defense counsel requested an adjournment of the trial for six weeks in order to complete their review of the voluminous documentation at issue in this case and prepare a proper defense. As the Supreme Court once said, "a myopic insistence upon expeditiousness in the face of a justifiable request for a delay can render the right to defend with counsel an empty formality." Ungar v. Sarafite, 376 U.S. 575, 590, 84 S.Ct. 841, 849, 11 L.Ed.2d 921 (1964). The court is convinced by defense counsels' representations that such an adjournment is warranted and adjourns the trial until June 9, 2003, at 10:00 a.m in Syracuse, New York. This adjournment gives defense counsel more than ample time to prepare their defense and accommodates the court's prior obligations.
II. Attorney Disqualification
Although the Sixth Amendment provides for the right of the accused to counsel in all criminal prosecutions, the United States Supreme Court has held that such right does not guarantee the accused the right to counsel of his choice. See Wheat v. United States, 486 U.S. 152, 158-59, 108 S.Ct. 1692, 1696-97, 100 L.Ed.2d 140 (1988) ("[W]hile the right to select and be represented by one's preferred attorney is comprehended by the Sixth Amendment, the essential aim of the Amendment is to guarantee an effective advocate for each criminal defendant rather than to ensure that a defendant will inexorably be represented by the lawyer whom he prefers.") (citing Morris v. Slappy, 461 U.S. 1, 13-14, 103 S.Ct. 1610, 1617-18, 75 L.Ed.2d 610 (1983)). The right to counsel "was designed to assure fairness in the adversarial criminal process," and thus the focus of Sixth Amendment jurisprudence is on that process rather than "on the accused's relationship with his lawyer as such." Wheat, 486 U.S. at 159, 108 S.Ct. at 1697 (quoting United States v. Cronic, 466 U.S. 648, 657 n. 21, 104 S.Ct. 2039, n. 21 (1984)). A defendant's right to be represented by counsel of choice is limited in part because federal courts are charged with "ensuring that criminal trials are conducted within the ethical standards of the profession and that legal proceedings appear fair to all who observe them." Wheat, 486 U.S. at 160, 108 S.Ct. at 1698. Thus, the court must balance the defendant's right to counsel of his choice with "the interests of the courts in preserving the integrity of the [judicial] process and the government's interests in ensuring a just verdict and a fair trial." United States v. Levy, 25 F.3d 146, 155 (2d Cir. 1994). Therefore, while federal courts must recognize a presumption in favor of a defendant's counsel of choice, that presumption may be overcome by a demonstration of actual conflict as well as by a showing of serious or potential conflict. See Wheat, 486 U.S. at 164, 108 S.Ct. at 1700.
In the Second Circuit, motions to disqualify an attorney are committed to the sound discretion of the court. See Cheng v. GAF Corp., 631 F.2d 1052 (2d Cir. 1980) vacated on other grounds, 450 U.S. 903, 101 S.Ct. 1338, 67 L.Ed.2d 327 (1981); see also Young v. Cent. Square Sch. Dist., 213 F. Supp.2d 202 (N.D.N.Y. 2002); Marshall v. State of N.Y. Div. of State Police, 952 F. Supp.2d 103 (N.D.N.Y. 1997). Courts within the Second Circuit, however, view motions to disqualify with disfavor and a party seeking disqualification must meet a high standard of proof before disqualification will be granted. See Marshall, 952 F. Supp.2d at 106.
Although Cheng was subsequently vacated on jurisdictional grounds, the Second Circuit reaffirmed its holding in Cheng v. GAF Corp., 747 F.2d 97, 98 (2d Cir. 1984), vacated on other grounds, 472 U.S. 1023, 105 S.Ct. 3493, 87 L.Ed.2d 626 (1985). Moreover, as explained by Baird v. Hilton Hotel Corp., "it is abundantly clear that the Second Circuit considers the reasoning of its first Cheng opinion to be sound, even though it recognizes, as a procedural matter, [that] the opinion is not binding on the district courts of this circuit." 771 F. Supp. 24, 26 n. 1 (E.D.N.Y. 1991).
An attorney may be disqualified from representing a client if:
(1) the moving party is a former client of the adverse party's counsel; (2) there is a substantial relationship between the subject matter of the counsel's prior representation of the moving party and the issues in the present lawsuit; and, (3) the attorney whose disqualification is sought had access to, or is likely to have had access to, relevant privileged information in the course of his prior representation of the client. Evans v. Atrek Systems Corp., 715 F.2d 788, 791 (2d Cir. 1983).
Regarding the third factor above, "where it can reasonably be said that in the course of the former representation the attorney might have acquired the information related to the subject matter of his subsequent representation, it is the court's duty to order the attorney disqualified." Marshall, 952 F. Supp.2d at 109 (quotations and citations omitted). "If the court determines that the attorney should be disqualified, then it must also decide whether [his] present firm must [too] be disqualified." Cent. Square Sch. Dist., 213 F. Supp.2d at 216. In addition, the Second Circuit has opined that:
disqualification motions should be granted where the attorney in question is potentially in a position to use privileged information obtained during prior representation of the movant . . . Disqualification of counsel in such cases is rooted in notions of fundamental fairness; allowing an attorney to represent a client in a situation where he may use information obtained in the course of former representation of the client's adversary gives the client an "unfair advantage." United States v. Cunningham, 672 F.2d 1064, 1072 (2d Cir. 1982) (quoting United States v. Ostrer, 597 F.2d 337, 339-40 (2d Cir. 1979)).
The Second Circuit has explained that "there are many situations in which a district court can determine that disqualification of counsel is necessary. The most typical is where the district court finds a potential or actual conflict in the chosen attorney's representation of the accused, either in a multiple representation situation or because of the counsel's prior representation of a witness or co-defendant." United States v. Zichetello, 208 F.3d 72, 104 (2d Cir. 2000) (quoting United States v. Locascio, 6 F.3d 924, 931 (2d Cir. 1993)). Regarding counsel's prior representation of a witness or co-defendant, the concern is that the attorney-client relationship with the witness or col-defendant gives rise to continuing obligations of loyalty and confidentiality that may be breached when, for example, the rigors of cross-examination require counsel to exploit those confidences. Conversely, where counsel upholds those confidences, "the representation of the . . . client might be ineffective due, for example, to the inability of counsel to conduct a thorough cross-examination." United States v. Gotti, 9 F. Supp.2d 320, 324 (S.D.N.Y. 1998) (citing United States v. Leslie, 103 F.3d 1093, 1098 (2d Cir. 1997)). A waiver of conflict of interest by both parties may assuage this problem. See Id. (citing United States v. Lussier, 71 F.3d 456, 462 (2d Cir. 1995); but see United States v. Falzone, 766 F. Supp. 1265 (W.D.N.Y. 1991) (granting government's motion to disqualify an attorney where government witnesses joined in the motion, and either the attorney or his firm, depending on which witness, formerly represented the government witnesses).
In addition, the Second Circuit has recognized the American Bar Association Code of Professional Responsibility ("Code") as providing appropriate guidelines for determining proper professional behavior. See Fund of Funds, Ltd. v. Arthur Andersen Co., 567 F.2d 225, 227, n. 2 (2d Cir. 1977). Pursuant to Code Cannon 5, Disciplinary Rule 5-105(D), "`[i]f a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule, no partner, or associate, or any other lawyer affiliated with him or his firm, may accept or continue such employment.'" Cheng, 631 F.2d at 1056; see also Cardinale v. Golinello, 43 N.Y.2d 288, 295, 401 N.Y.S.2d 191 (1977); Greene v. Greene, 47 N.Y.2d 447, 453, 418 N.Y.S.2d 379 (1979) ("An attorney traditionally has been prohibited from representing a party in a lawsuit where an opposing party is the lawyer's former client . . . To obtain disqualification of the attorney, the former client need not show that confidential information necessarily will be disclosed in the course of the litigation; rather, a reasonable probability of disclosure should suffice."). Code Canon 5, Disciplinary Rule 5-105(D) creates a presumption that the attorneys within a law firm will communicate client confidences; this presumption, however, may be rebutted if the attorneys institute "appropriate and effective screening measures . . . to prevent the dissemination of confidences by a disqualified attorney." Marshall, 952 F. Supp.2d at 110. The court in Cent. Square Sch. Dist., however, noted that "in instances in which the law firm was relatively small, courts have found that there are doubts that even the most stringent screening devices would be effective." 213 F. Supp.2d at 216. (emphasis added). The court in Cent. Square Sch. Dist. disqualified the law firm there in question because (1) no formal screening mechanisms were in place at the time the disqualified attorney joined the firm and (2) the relatively small size of the firm raised doubts in its mind that even the most stringent screening mechanisms could be effective). See id. As the Second Circuit has stated, "in the disqualification situation, any doubt is to be resolved in favor of disqualification." Hull v. Celanese Corp., 513 F.2d 568, 571 (2d Cir. 1975).
The ABA Model Rules of Professional Conduct, the ABA Model Code of Professional Responsibility, and the New York Code of Professional Responsibility all prohibit members of the same firm from representing clients in matters which are materially adverse to the interests of a former client unless the appropriate waivers have been obtained. See United States v. Lech, 895 F. Supp. 586, 591 (S.D.N.Y. 1995) (citing ABA Model Rules of Professional Conduct 1.9 and 1.10; ABA Model Rules of Professional Responsibility DR 5-105; New York Code of Professional Responsibility DR 5-105, 22 N.Y.C.R.R. § 1200.24(D)).
In Cheng, the Second Circuit addressed the effectiveness of the "Chinese Wall" in place in that case and found it lacking. The Second Circuit stilled harbored doubts "as to the sufficiency of [the] preventive measures," and therefore could "hardly expect Cheng [the party moving for disqualification] or members of the general public to consider the general quarantine impenetrable." Cheng, 631 F.2d at 1058. Given the relatively small size of the firm (thirty-five attorneys overall and twenty-one in the New York office where the attorney was located), and the fact that the firm was still actively pursuing the litigation in question, the Second Circuit did not believe that the screening mechanisms in place could safeguard against inadvertent disclosures for the duration of the representation. Id. 631 F.2d at 1057-58; see also Cent. Square Sch. Dist., 213 F. Supp.2d at 219 (finding that the relatively small size of the firm raised doubts as to the effectiveness of even the most stringent screening mechanisms); Marshall, 952 F. Supp. at 112 (explaining that the relatively small size of the firm in question (fifteen lawyers) raised doubts that even the most stringent screening mechanisms could have been effective); Baird v. Hilton Hotel Corp., 771 F. Supp. 24, 27 (E.D.N.Y. 1991) (finding the reasoning of Cheng persuasive and disqualifying a nine attorney law firm due in part to the fact that the disqualified attorney's firm was smaller than the one in Cheng).
In building its "Chinese Wall," the firm: assigned the attorney to a department in the firm that did not partake in the litigation, did not permit the attorney to work or discuss the case while at the firm, and did not permit the attorney to have any substantive involvement with the case. See Cheng, 631 F.2d at 1057.
Given the facts, circumstances and applicable law as set forth, the court concludes that it must disqualify Jeffrey Bernfeld from representing defendants Alexander Salvagno and AAR Contractor, Inc. First, the court finds that Government has demonstrated a serious or potential conflict in Jeffrey Bernfeld's representation of defendants. The court finds that a substantial relationship exists between the subject matter of DeMatteo's prior representation of the thirteen targets and the issues involved in the defense of Jeffrey Bernfeld's clients, for they stem from a common prosecution. Second, none of DeMatteo's thirteen former clients, with interests adverse to those of defendants, have waived the conflict of interest; moreover, one of them, cooperating co-defendant Mongato has joined in the Government's motion. Third, the court already disqualified DeMatteo, Jeffrey Bernfeld's law partner, because a conflict of interest existed as to his representation of multiple targets, each of whom had potential, and some actual, criminal liability. Although not specifically noted in the court's previous order disqualifying DeMatteo, it is clear DeMatteo's disqualification was compelled by Code Cannon 5, Disciplinary Rule 5-105(B). Because Jeffrey Bernfeld is DeMatteo's law partner, Code Cannon 5, Disciplinary Rule 5-105(D), supra, compels his disqualification too. Fourth, the court recognizes, as noted above, that although Code Cannon 5, Disciplinary Rule 5-105(D) presumes that the attorneys within a law firm will communicate client confidences, this presumption may be rebutted if the attorneys institute appropriate and effective screening measures to prevent the dissemination of confidences by a disqualified attorney. The court, however, finds the screening measures implemented by Jeffrey Bernfeld and DeMatteo insufficient to rebut this presumption. The court does not question Jeffrey Bernfeld's or DeMatteo's sincere efforts to screen each other from their involvement in this case but after considering the facts harbors doubts as to the effectiveness of the screening measures they implemented. Although Jeffrey Bernfeld and DeMatteo aver that they implemented the screening procedures prior to forming their law firm, it is not clear to the court how disclosures, albeit inadvertent, can be prevented in a firm consisting of only two attorneys; Jeffrey Bernfeld and DeMatteo are the only attorneys who practice in their firm. See Cheng, 631 F.2d at 1058 ("[T]here exists a continuing danger that [counsel] may unintentionally transmit information gained through his prior association . . ."). Finally, Code Canon 9's warning that "A Lawyer Should Avoid Even the Appearance of Professional Impropriety" further compels Jeffrey Bernfeld's disqualification. Cf. Emle Indus., Inc. v. Patentex, Inc., 478 F.2d 562, 565 (2d Cir. 1973) (explaining that where public confidence in the Bar would be undermined, "even an appearance of impropriety requires prompt remedial action by the court.").
DR 5-105(B) provides in pertinent part: A lawyer shall not continue multiple employment if the exercise of independent professional judgment in behalf of a client will be or is likely to be adversely affected by the lawyer's representation of another client, or if it would be likely to involve the lawyer in representing differing interests.
The court recalls Professor Charles Wolfram's salient observation that "in the end there is little but the self-serving assurance of the screening-lawyer foxes that they will carefully guard the screened-lawyer chickens. Whether the screen is breached will be virtually impossible to ascertain from outside the firm. On the inside, lawyers whose interests would all be served by creating leaks in the screen and revealing the leaks would not regularly be chosen as guardians by anyone truly interested in assuring that leaks do not occur." Charles W. Wolfram, Modern Legal Ethics § 7.6.4, at 402 (West 1986).
Jeffrey Bernfeld's disqualification does not interrupt David Bernfeld's representation of defendants Alexander Salvagno and AAR Contractor, Inc. Should defendants wish to retain additional counsel, however, they are directed to do so by March 14, 2003, and inform the court of same in writing.
ORDERED, that defendants' motion to adjourn the trial is GRANTED. The trial is reset for June 9, 2003, 10:00 a.m. in Syracuse, New York. It is further
ORDERED, that the Government's motion to disqualify Jeffrey L. Bernfeld, Esq. is GRANTED. It is further
ORDERED that Clerk of the Court serve a copy of this Memorandum — Decision and Order upon the parties by regular mail.