Opinion ID: 197990
Heading Depth: 2
Heading Rank: 1

Heading: Selective Prosecution and Conflict of Interest

Text: 6 Graham asserts that her conviction violated her right to due process because it was the product of selective prosecution on the part of the government. She maintains that the district court erred in failing to hold an evidentiary hearing on the issue of selective prosecution. Graham points to the fact that Dime Bank-New York was not indicted on criminal charges after it gave a $2,000,000 donation to a nonprofit housing program in Manchester, New Hampshire. She also notes that the U.S. Attorney in charge of the case resides in the New Hampshire community that received the donation. Further complicating this picture is the fact that DimeNY was partially owned by the FDIC and that the decision not to indict the bank came just before a successful public offering of shares in the bank, thus benefitting the FDIC by ensuring that the sale would not be marred by threats of future criminal liability. By cumulating all of these circumstances, Graham suggests that she was selectively prosecuted either because she did not have the wealth to avoid criminal liability through civic contributions or because a government conflict of interest kept the bank from being prosecuted. 7 An improper selective prosecution arises when a defendant has been singled out for prosecution when others similarly situated have not been prosecuted and the prosecutor's reasons for doing so were impermissible. U.S. v. Magana, 127 F.3d 1, 8 (1st Cir.1997); see also U.S. v. Penagarcano-Soler, 911 F.2d 833, 837-38 (1st Cir.1990). The prosecutor is presumed to have acted in good faith for reasons of sound governmental policy. Penagarcano-Soler, 911 F.2d at 837 (citing U.S. v. Saade, 652 F.2d 1126, 1135 (1st Cir.1981)). But if the defendant alleges facts that tend to show that she has been selectively prosecuted and that raise a reasonable doubt about the propriety of the government's purpose, then she is entitled to an evidentiary hearing unless the government puts forward adequate countervailing reasons to refute the charge and ... the court is persuaded that the hearing will not be fruitful. U.S. v. Goldberg, 105 F.3d 770, 776 (1st Cir.1997) (internal quotations and citations omitted). 8 Although Graham may have presented enough evidence to create a prima facie case of selective prosecution by suggesting that the bank's monetary charitable contribution precluded its prosecution, the government refuted this presumption with adequate reasons for its decisions. Specifically the government offered a list of eight factors it considered in its decision not to indict Dime-NY: (1) Dime's merger with Anchor in 1995; (2) the fact that current senior management was not in those positions during the years of suspected criminal activity; (3) the bank and its shareholders had suffered significant losses from the fraudulent conduct of former employees; (4) the newly formed institution had implemented stringent fraud detection procedures; (5) the rehabilitative step of contributing $2,000,000 to the Manchester Neighborhood Housing Services, Inc.; (6) the implementation of the Dime Borrowers Associations Borrowers Assistance Program II; (7) payment of $150,000 to the Dime Borrowers Associations; and (8) the continued cooperation of Dime-NY in the ongoing grand jury investigation. 9 The district court considered this list of factors and found that it adequately explained the government's actions and that no evidentiary hearing on the issue of selective prosecution was needed. The court further found that the accusations of government conflict of interest were not substantial enough to raise any presumption of prosecutorial misconduct. 10 We review a district court's decision not to hold an evidentiary hearing on selective prosecution for abuse of discretion. Goldberg, 105 F.3d at 776 (citing U.S. v. Gary, 74 F.3d 304, 313 (1st Cir.), cert. denied, 518 U.S. 1026, 116 S.Ct. 2567, 135 L.Ed.2d 1084 (1996)). In deciding whether the district court should have granted an evidentiary hearing on the issue of selective prosecution we are faced with a judgment call--tempered on appeal by the deferential standard of review--as to the force and specificity of the allegations, the strength of the response, and the likelihood that a hearing would be helpful. Goldberg, 105 F.3d at 776 (citing U.S. v. Lpez, 71 F.3d 954, 963-64 (1st Cir.1995), cert. dismissed, 518 U.S. 1057, 117 S.Ct. 38, 135 L.Ed.2d 1129 (1996)). In this case the district court carefully considered both Graham's allegations and the government's explanation before denying an evidentiary hearing. 11 Although the timing of the donation may have created a reasonable doubt about the propriety of the government's purpose, we agree that the government adequately refuted the charge so that a hearing was not necessary. Furthermore we also agree that Graham's allegation of conflict of interest concerning the FDIC's financial interest in the bank does not create a presumption of improper prosecutorial selection. We have found no case law to support the preclusion of the Department of Justice from cases involving banks in which the FDIC has an interest. Accordingly, we find no abuse of the district court's discretion in denying Graham's request for an evidentiary hearing or in denying her motion to dismiss.