Opinion ID: 1162526
Heading Depth: 3
Heading Rank: 3

Heading: the federal government's bargain with joseph conforte

Text: After the Las Vegas grand jury failed to return an indictment against respondent, officials within the Department of Justice, the FBI and the IRS began to pursue certain allegations regarding respondent's association with a notorious felon by the name of Joseph Conforte. Three subsequent grand juries were empaneled, two in Portland, Oregon, and one in Reno, Nevada, in order to investigate allegations that respondent had solicited and accepted bribes from Conforte while serving as a federal district judge. See United States v. Claiborne, 781 F.2d 1327, 1328-9 (9th Cir.1986) (Reinhardt, J. dissenting). The first Oregon grand jury proceeding involving respondent was convened on May 11, 1982. This grand jury investigated allegations concerning respondent's involvement with Conforte in alleged violations of 18 U.S.C. § 201 (bribery of a public official), and 18 U.S.C. § 1952 (The Travel Act). The grand jury's mandate expired in December of 1982 without the return of any indictment against respondent. The second Oregon grand jury was convened on March 16, 1983. Similarly, this grand jury investigated, among other things, allegations that respondent accepted bribes from Conforte. The second Oregon grand jury also never returned an indictment against respondent. A third grand jury investigation was commenced in Reno, Nevada, in June of 1983. [48] Unlike the two prior Oregon investigations, the Reno grand jury heard the direct testimony of Conforte, and returned a seven-count indictment against respondent on December 8, 1983, one day after Conforte testified before it. [49] As detailed below, the factual history underlying the federal government's plea bargain negotiations with Conforte and the concessions that the government ultimately extended in exchange for Conforte's testimony raise additional questions about the integrity of investigatory tactics employed in the pursuit of respondent's conviction. Joseph Conforte is a well-known owner of a house of prostitution located in Storey County, Nevada. Conforte's activities in Northern Nevada historically have attracted extensive public attention and media coverage. For example, following the release in March of 1976 of a Washoe County Grand Jury report detailing Conforte's associations and dealings with local politicians, the Reno Evening Gazette and the Nevada State Journal began an editorial campaign assailing Conforte's web of influence in local affairs. The newspapers' editorial series spanned a period of more than three months and was intensified in May [of 1976] after Argentine heavyweight boxer Oscar Bonavena was shot and killed outside Conforte's Mustang Ranch brothel. [50] Subsequently, three Gazette-Journal editorial writers were awarded the Pulitzer Prize for editorial writing in recognition of their insightful and constructive series condemning Conforte's influence and activities in Northern Nevada. [51] Apparently, however, the intensive public scrutiny focused upon Conforte had little effect on his local activities. In 1977, a ten-count indictment was filed against Conforte and his wife, Sally, charging them with willfully attempting to evade and defeat employment withholding taxes in violation of 26 U.S.C. § 7201. See, e.g., United States v. Conforte, 457 F. Supp. 641 (D.Nev. 1978), cert. denied, 449 U.S. 1012, 101 S.Ct. 568, 66 L.Ed.2d 470 (1980) (decision denying Conforte's motion for new trial). As the federal district court noted in the above-cited decision, Conforte is no stranger to the criminal justice system. In particular, the court observed: 1. In 1960, he was convicted of extortion by a Nevada state court and was sentenced to state prison. 2. Shortly after that conviction, he pled guilty to a federal income tax violation charge in the District of Nevada and was sentenced by Judge William Mathes to federal prison. While serving his sentence, Conforte made a motion to withdraw his plea of guilty to the federal charge. That motion was heard by Judge Thompson and was denied. The defendant was subsequently released from McNeil Island federal prison in 1965. 3. In 1968, Conforte was indicted and tried before Judge Thompson for a violation of the Mann Act, 18 U.S.C. § 2421 et seq. At the conclusion of the government's case, Judge Thompson granted a motion for judgment of acquittal. 4. In 1970, the Internal Revenue Service filed a civil complaint for condemnation and forfeiture of certain trailer houses used by Conforte in his prostitution business. Again, the matter was heard by Judge Thompson, who decided the case in Conforte's favor. Id. at 645-46. Parenthetically, we note that respondent first became acquainted with Conforte when respondent successfully defended him in 1967 against the above-noted charges alleging that Conforte violated the Mann Act. [52] Further, in July of 1979, Conforte was again indicted in Washoe County and charged with bribery of a Lyon County public official. [53] In the meantime, the federal district court had entered judgments of conviction against the Confortes on four of the ten counts of evasion of federal employment withholding taxes. [54] The Confortes appealed those convictions and the subsequent denial of their motion for a new trial to the Ninth Circuit Court of Appeals. On April 29, 1980, the Court of Appeals entered a decision affirming the judgments of conviction in the tax case, but vacating portions of the sentences imposed by the district court. See United States v. Conforte, 624 F.2d 869 (9th Cir.) cert. denied, 449 U.S. 1012, 101 S.Ct. 568, 66 L.Ed.2d 470 (1980). In part, the Court of Appeals concluded that although one of the five-year sentences imposed on Joseph Conforte was entirely proper, the sentences imposed by the federal district court on the remaining counts were improperly based upon a legal and factual conclusion for which there was no support. Id. at 882-83. Accordingly, the case was remanded to the district court for further sentencing. The Confortes then sought review in the United States Supreme Court, and that court denied certiorari on December 1, 1980. See Conforte et ux. v. United States, 449 U.S. 1012, 101 S.Ct. 568, 66 L.Ed.2d 470 (1980). A resentencing hearing was scheduled for December 23, 1980, before the federal district court in Reno, Nevada. [55] The night before that hearing, however, Conforte fled to Mexico carrying with him at least a half a million dollars in cash. [56] He testified at respondent's first trial that he fled the jurisdiction of the United States in order to avoid confinement under his sentence of imprisonment. [57] Thus, at the time Conforte left the United States, he faced a sentence of imprisonment of at least five years, and possibly as much as twenty years, pursuant to his tax conviction in federal court. Moreover, Conforte faced prosecution in Washoe County, Nevada, pursuant to the indictment alleging bribery of a local Lyon County official. In connection with that pending state criminal prosecution, Washoe County District Attorney Cal Dunlap publicly avowed that in the event that Conforte was convicted on the bribery charges, he would seek an habitual criminal enhancement warranting the imposition of a life sentence because of Conforte's prior felony convictions. [58] Additionally, as a result of his flight from the United States, Conforte was indicted by a federal grand jury on March 10, 1981, for failing to appear as required by the terms and conditions of his bond in violation of 18 U.S.C. § 3150(1). [59] The State of Nevada filed similar charges against Conforte in connection with his subsequent failure to appear in the Nevada bribery case. [60] At the time Joseph Conforte fled the jurisdiction of the state and federal courts, and throughout the period during which he remained a fugitive from justice, the Confortes were engaged in an ongoing dispute with the IRS over the exact amount of their income tax liability, as well as their liability relating to the employment withholding taxes. See, e.g., Conforte v. C.I.R., 692 F.2d 587 (9th Cir.1982). The exact amount of Conforte's overall tax liability over the years has been difficult to assess. For example, in testimony before a federal grand jury on April 13, 1982, Gerald Swanson, the former director of the IRS for the District of Nevada, testified that since 1956 the IRS had been working to try to get Mr. Conforte in conformance with the Income Tax laws of the United States. Swanson further testified that Mr. Conforte arranged his tax matters in such a fashion making it virtually impossible for the Internal Revenue Service to determine his proper income. [61] According to Swanson, beginning in February of 1978, the IRS instituted jeopardy assessment proceedings against the Confortes' assets because of the likelihood that Conforte might flee the jurisdiction or place his assets outside of the collection reach of the Internal Revenue Service. [62] Swanson further indicated that although the exact amount of Conforte's tax liability had not been finalized, as of April 13, 1982, the IRS had liens of record of over $26 million of jeopardy assessments asserted against Mr. and Mrs. Conforte. [63] In addition to the criminal and tax concerns facing Conforte, it is also noteworthy that at least two civil suits were pending against him in federal court at the time of his departure. Specifically, the family of the slain heavyweight contender, Oscar Bonavena, filed a civil action on May 18, 1977, alleging that Conforte's negligent supervision of an employee resulted in Bonavena's wrongful death. [64] Conforte was also named as a defendant in a civil action asserting claims for false arrest and for the violation of the civil rights of an individual arrested in connection with a fire at Conforte's house of ill repute. [65] Under these circumstances, in December of 1980, Conforte apparently decided to avail himself of a warmer and more hospitable climate. Thus, he slipped across the border into Mexico, sojourned briefly in Acapulco and Mexico City, and eventually took up residence in Brazil, where he was free from the threat of extradition back to the United States. [66] Before he entered Mexico, however, Conforte endeavored to test the federal government's receptiveness to a deal respecting his most pressing concern, his pending imprisonment. He telephoned Geoffrey Anderson, the chief prosecutor for the federal strike force in Las Vegas. [67] Conforte testified at respondent's first trial that he had read in the newspapers that Anderson was in charge of the strike force, and that Anderson and Judge Claiborne were fighting or opposing each other. [68] Conforte told Anderson that the only thing he was guilty of was owning a little brothel, and suggested that in exchange for some help from Anderson, he could supply incriminating information about Judge Claiborne. Specifically, Conforte stated, If you want him, I will give him to you in [sic] a platter. [69] It is unclear whether this telephone conversation with Anderson in late 1980 constituted the first contact between Conforte and federal agents intent on investigating Judge Claiborne. Specifically, Conforte testified at respondent's first trial that when he telephoned Anderson in December 1980, he (Conforte) didn't know anything about an investigation [involving Judge Claiborne]. [70] Conforte further testified that before he left the country in 1980, he had never met a special agent for the FBI named Dan Camillo. [71] Additionally, on November 2, 1982, Joseph Yablonsky, the special-agent-in-charge of the Las Vegas office of the FBI, testified in a related case that he had assigned an agent to contact Conforte only after Conforte had telephoned Anderson in December of 1980. [72] On the other hand, respondent claims that Yablonsky had assigned special agent Dan Camillo to contact Conforte in the early summer of 1980. [73] Respondent further asserts that in the course of Camillo's visits with Conforte, Conforte was advised that Yablonsky was willing to work out a deal if Conforte would deliver Judge Claiborne. According to respondent, at that time, Conforte consistently maintained that he had nothing on the judge. [74] Respondent also alleges that after the Ninth Circuit Court of Appeals rendered its affirmance of Conforte's tax conviction on April 29, 1980, Yablonsky instructed Camillo to take one last shot at Conforte due to Conforte's frame of mind. Again, however, respondent maintains that Conforte allegedly indicated at that time that he knew nothing that could implicate respondent in any wrongdoing. [75] Most of respondent's assertions in this regard appear to be based on information disclosed to reporters for the Las Vegas Sun in the late summer of 1982 by a federal source with intimate knowledge of the operations of the Las Vegas FBI office. [76] In a hearing prior to respondent's first trial, however, two Las Vegas Sun reporters declined to reveal the official sources for those factual allegations. [77] Thus, in judging the credibility of the conflicting accounts in this regard, this court is presented with some difficulty. We feel obligated to note, however, that the reputations for veracity of Joseph Conforte, as well as Joseph Yablonsky, have at times been subject to question. In particular, as discussed below, much of Conforte's testimony at respondent's first trial and before the only grand jury to return an indictment against respondent has been discredited by substantial evidence presented by the defense. Additionally, it seems that Yablonsky was not always as truthful, or at least as forthcoming, as one would expect in the case of a federal law enforcement official. In 1983, for example, Yablonsky was censured and placed on probation by the FBI Director, William Webster, as a result of improper inquiries Yablonsky had made to the United States Air Force about the personnel records of a candidate for state office in Nevada, Brian McKay. [78] At the time of Yablonsky's inquiries, McKay was running against Yablonsky's friend, Mahlon Brown, in a hotly contested race for the office of Nevada State Attorney General. Reportedly, Yablonsky first denied that he had made any such inquiries, then later admitted that he had done so but denied that he was fishing for disparaging information about McKay that would benefit his friend's campaign. [79] Although Director Webster characterized Yablonsky as a highly competent and experienced field manager, Webster was also quoted as stating that Yablonsky's actions were inappropriate and made at a time and under circumstances likely to bring into question the integrity of the FBI's inquiries. [80] Director Webster also characterized Yablonsky's actions as involving extremely bad judgment in utilizing the files of another agency to inquire about Mr. McKay for a reason I did not consider adequate or sufficient. [81] Additionally, after his retirement, Yablonsky was investigated by the FBI and a federal grand jury concerning his failure to inform bank officials that his bank account had been mistakenly credited with $40,000 as a result of a computer error. The mistaken credit apparently went undiscovered for three years until it was ultimately revealed by a bank audit. The grand jury, under the direction of the Justice Department's Public Integrity Section, declined to return a criminal indictment against Yablonsky. [82] At any rate, it is uncontested that Conforte's overture to Anderson piqued the considerable interest of some agents within the FBI, the Public Integrity Section, and the IRS. In June or July of 1981, special agent Camillo and another FBI agent went to the residence of John Colletti, Conforte's former bodyguard. Conforte telephoned Colletti's residence from Brazil and spoke with the agents. [83] On or about this time, Conforte also engaged the services of Nevada attorney Peter Perry for the sole purpose of assisting him in his negotiations with the federal government. [84] Thereafter, during the period that Conforte remained a fugitive from justice, numerous meetings between Conforte, Perry and agents of the FBI, the Public Integrity Section and the IRS took place in Brazil, Costa Rica, and Mexico. [85] As the negotiations between Conforte, Peter Perry and the federal agents progressed, it became clear that Conforte was demanding an expensive price in exchange for his testimony that he had bribed Judge Claiborne. For example, Conforte refused to return to the United States to testify unless the federal government guaranteed he would spend no more than one year in prison. [86] Additionally, the negotiations involved a demand that Conforte's overall tax liability be settled for approximately three and one-half million dollars. [87] This latter demand, of course, necessitated the participation and cooperation of IRS officials in the negotiations. In an interview conducted by the Office of the United States Treasury Inspector General, the former IRS District Director for Nevada, Gerald Swanson, indicated that Yablonsky contacted Archie Banbury, an agent in the Criminal Investigation Division of the IRS, in September of 1981, and briefed Banbury on the substance of Conforte's demands. [88] Thereafter, according to Swanson, Banbury suggested that the IRS should interview Conforte in Brazil and convene a grand jury to look into the Claiborne matter. [89] Although Swanson was skeptical of Conforte's allegations because of his familiarity with Conforte's history, he gave permission for an IRS agent to go to Brazil to interview Conforte. Swanson, however, wanted Banbury to get corroborative evidence before allowing the IRS to get involved in a grand jury proceeding as part of the `deal' being proposed by the FBI and the Department of Justice. [90] Following the IRS agent's return from Brazil in December of 1981, Swanson remained skeptical because, in his view, no corroborating smoking gun evidence was presented which could justify a grand jury inquiry. [91] Further, a memorandum of Swanson's interview with the Inspector General's office indicates that, based on a previous conversation with Yablonsky, it was clear to Swanson that Yablonsky had a Joe Louis mentality towards disposition of tax issues. In other words, Yablonsky made it clear to Swanson that he felt that IRS could simply reduce Conforte's tax liabilities along the lines of 10 cents on the dollar in exchange for information Conforte allegedly had on Federal Judge Claiborne (along with other concessions Conforte wanted). [92] According to FBI Director Webster, in February 1982, the IRS received a complaint from Peter Perry alleging that Swanson may have been involved in soliciting a bribe from Conforte. Perry claimed that Peter Lemberes informed him that Alex Lemberes could arrange a reduction in Conforte's tax liability from $7 million to $3.5 million in exchange for $350,000. The IRS and the FBI then began investigating whether Swanson improperly disclosed tax information to Alex and Peter Lemberes. [93] Subsequently, the FBI and the Public Integrity Section, assisted by agents of the IRS and Conforte's attorney Peter Perry, reportedly initiated a sting operation targeting Swanson, Alex Lemberes and Alex's brother, Peter Lemberes. Alex Lemberes, a close friend of Swanson, was a former Green Beret commander, a graduate of West Point and a recipient of the Army's Legion of Merit award. [94] To conduct this sting investigation known as Confortescam, the FBI obtained the assistance of Conforte's attorney Peter Perry. The FBI wired Perry with electronic listening and recording equipment and dispatched him to secure incriminating evidence against Swanson and the Lemberes brothers in a conspiracy-bribery scheme. In essence, Perry's role was to entice Peter Lemberes with a substantial monetary incentive to persuade his brother Alex, and eventually Swanson, to conspire illegally to reduce Conforte's tax liability. [95] Interestingly, attorney Perry thus simultaneously served as counsel for Conforte, and as an agent for the federal government. Further, we note that just prior to these events, Perry had served as counsel for Peter Lemberes in a criminal case in Nevada. See, e.g., Lemberes v. State, 97 Nev. 492, 634 P.2d 1219 (1981). Thus, it would appear that in assisting the FBI, Perry was motivated by more than an upright desire to uncover corruption. As Conforte's attorney, Perry had a vested interest in the outcome of the investigation. Obviously, by implicating Swanson in criminal wrongdoing, Perry could much improve Conforte's prospects of negotiating a favorable deal with the IRS. Further, because of Swanson's skepticism about Conforte's proposed testimony incriminating respondent, and his expressed concerns about the propriety of a significant reduction in Conforte's tax liability, Swanson has asserted that federal agents may have targeted him in the Confortescam sting in order to remove him as an obstacle to the `deal' that would help them `hang a federal judge.' [96] Moreover, it has been alleged and reported that Peter Lemberes may have been targeted in the government's Confortescam sting because of rumors that he had threatened to disclose evidence allegedly linking Conforte with the killing of Oscar Bonavena. [97] Perry's questionable undercover activities eventually resulted in grand jury indictments against Alex and Peter Lemberes. The grand jury, however, declined to indict Gerald Swanson. Although Alex Lemberes eventually pleaded guilty to a reduced charge, the press has reported that he maintains he did nothing illegal, and that he only pleaded guilty in order to negotiate a lesser sentence for his brother, who faced a possible maximum sentence of twenty-five years. [98] Swanson, although not indicted, was transferred to an IRS post in another jurisdiction. [99] A Treasury Department investigator later tendered a report condemning the FBI-IRS sting operation as `very dangerous, misleading and poor work.' See United States v. Claiborne, 781 F.2d 1327, 1329 (9th Cir.1986) (Reinhardt, J., dissenting). Again, as in the cases of Eddie LaRue and Charles Lee, it would appear that there is indeed factual support for respondent's assertion that in the pursuit of Judge Claiborne's removal from office, some federal agents may have overreached and abused their authority by dealing harshly, unjustifiably and apparently retributively with those who stood in the way of Judge Claiborne's prosecution. Conforte, on the other hand, received substantial concessions from the federal and local authorities. In early December 1983, he returned to the United States and was taken into custody by federal agents. On December 7, 1983, he testified before the federal grand jury investigating Judge Claiborne in Reno, Nevada. As noted, the grand jury indicted respondent Claiborne the following day. In exchange for Conforte's testimony before the grand jury and at Judge Claiborne's subsequent trial, the Department of Justice agreed to recommend: (1) that Conforte be resentenced in his federal tax conviction case to concurrent five-year terms on each of the four counts upon which he was convicted; (2) that all but 15 months of each of the five-year sentences be suspended; (3) that any sentence imposed by the court should be served concurrently with any sentence imposed on Conforte pursuant to pending charges in the State of Nevada; (4) that the federal indictment charging Conforte with failure to appear for resentencing in the tax conviction case should be dismissed; (5) that the Department of Justice would assist Conforte in negotiating plea agreements with regard to the charges pending against him in Nevada. [100] On December 9, 1983, Conforte appeared in Nevada district court and entered a negotiated plea of guilty to the charge alleging bribery of a Lyon County official. [101] In accordance with the plea negotiations, Nevada District Judge James Guinan sentenced Conforte to eighteen months to be served concurrently with the sentence that Conforte would thereafter receive pursuant to his federal conviction. In addition, Conforte was fined $10,000 and forfeited $200,000 in bail. Judge Guinan dismissed the pending charge respecting Conforte's earlier failure to appear in the state action, pursuant to the district attorney's recommendation. [102] On December 15, 1983, Conforte was resentenced pursuant to his tax conviction in a federal district court in Washington, D.C. [103] Conforte's federal tax case had been transferred from the District of Nevada to Judge Smith in the United States District Court for the District of Columbia in 1982, by order of the Chief Justice of the Supreme Court, Warren Burger. [104] On December 15, 1983, Judge Smith resentenced Conforte in conformity with the terms of the agreement set forth above. As Judge Reinhardt of the Ninth Circuit has pointed out: The reduction in Conforte's sentence may well have violated Fed.R.Crim.P. 35, see United States v. Hetrick, 644 F.2d 752 (9th Cir.1980); United States v. Pollack, 655 F.2d 243 (D.C. Cir.1980), as well as 18 U.S.C. § 3651 (1982), not to mention the Justice Department's policy on tardy motions to reduce sentences. See United States v. Claiborne, 781 F.2d 1327, 1329 (9th Cir.1986) (Reinhardt, J., dissenting). In the Hetrick case, cited above, the court ruled that the 120-day time limit established by Fed.R.Crim.P. 35 for reduction of a sentence is jurisdictional. See Hetrick, 644 F.2d at 756. Further, the court stated in Hetrick: We held in United States v. United States District Court, 509 F.2d 1352 (9th Cir.), cert. denied sub nom. Rosselli v. United States, 421 U.S. 962, 95 S.Ct. 1949, 44 L.Ed.2d 448 (1975), that the timely filing of a Rule 35 motion does not give a district court jurisdiction to entertain subsequent, untimely Rule 35 motions. The second motion will not be deemed to relate back to the first motion. 509 F.2d at 1356. Nor is the jurisdictional defect cured by styling the subsequent motion as a motion for reconsideration. Cf. United States v. United States District Court, 509 F.2d at 1356 (motion styled as a motion for clarification). Id. (Footnote omitted.) In Conforte's case, the Ninth Circuit Court of Appeals affirmed Conforte's conviction and five-year sentence on Count VII of the charging indictment on April 29, 1980. See United States v. Conforte, 624 F.2d 869 (9th Cir.), cert. denied, 449 U.S. 1012, 101 S.Ct. 568, 66 L.Ed.2d 470 (1980). On April 8, 1981, Judge Reed, a federal district judge for the District of Nevada, entered an order denying a motion filed by Conforte's attorneys seeking a reduction in the sentence imposed in Count VII pursuant to Fed.R. Crim.P. 35. [105] Thus, in light of the Hetrick case, it would appear that Judge Reinhardt reasonably questioned the propriety of Judge Smith's order entered in December of 1983, resentencing Conforte well beyond the 120-day jurisdictional time limit set forth in Rule 35. [106] In regard to Conforte's tax liability, his agreement with the federal government expressly stipulated: Mr. Conforte shall not receive financial benefit of any kind because of this agreement. The amount of any tax liability that Mr. Conforte may owe to the U.S. Treasury shall be determined between the Internal Revenue Service and/or the Tax Division, U.S. Department of Justice and himself. This agreement shall not favorably influence the determination of such tax liability. In fact, as Mr. Conforte believes, his cooperation as set forth herein has and may continue to detrimentally influence the government's determination of such liability. [107] It would appear, however, that Conforte's financial prospects suddenly improved after he began negotiating with the federal agents regarding the Claiborne matter. Conforte himself testified at respondent's first trial in March of 1984, that although the IRS at one point claimed his tax liability was in the neighborhood of $19 or $20 million, he eventually settled his whole tax liability for $7.3 million. [108] In summary, our review of the factual record reveals that in the pursuit of an indictment against Judge Claiborne, federal investigators and prosecutors convened no less than four grand juries before the testimony of a convicted felon, brothel owner and fugitive from justice finally convinced the Reno grand jury panel to return an indictment. The record before us further reveals substantial indications that a limited number of federal agents overzealously pursued a vendetta against respondent and quite possibly abused the authority and the public trust vested in them by virtue of their offices. In so doing, these agents may well have utilized retributive and retaliatory tactics in an effort to discredit those who maintained a less vindictive and more balanced perspective regarding the criminal investigatory process. Finally, those agents, who for whatever reasons became intent upon the successful prosecution of Judge Claiborne, were reduced to striking a bargain with an individual whose past history and whose financial and fugitive status provided considerable incentives for him to distort the truth, as well as substantial indications that he would not be disinclined to do so. As noted hereafter, the record of respondent's first trial discloses abundant evidence that, whether or not they perceived it to be so, federal agents may well have purchased perjurious testimony in their bargain with Joseph Conforte.