Rare legal gambit succeeds in fraud case

Posted: August 19, 2011

The largest affirmative-action fraud case in Pennsylvania history, already marked by feuding families and deception, has become a bit more interesting.

A federal appeals court in Philadelphia has declined to stop a trial judge from invoking an extremely rare and controversial power: Judicial immunity.

The case involves the tension between a man's Sixth Amendment right to call witnesses and his codefendant uncle's Fifth Amendment right to silence.

Immunity is typically granted by prosecutors in exchange for testimony, and defense lawyers have long said the playing field is unfair because they cannot make similar deals. Judicial immunity allows a judge to grant a critical witness immunity on behalf of the defense.

The U.S. Court of Appeals for the Third Circuit in Philadelphia is the only federal appeals court that recognizes this power. Peter Goldberger of Ardmore, who wrote a friend-of-the-court brief for the National Association of Criminal Defense Lawyers, said Wednesday's decision was significant.

"The word is getting out that a judge granted a defense immunity request and the court of appeals let it stand," he said. "That encourages defense lawyers and emboldens judges to use this power. I'm sure you'll see more requests and more granted."

The case involves an alleged $119 million minority contracting fraud, including SEPTA work on the Market-Frankford Line, and is being tried in Harrisburg. Joseph W. Nagle, the nephew, was president from 2004 to 2008 of Schuylkill Products, a half-century-old family business that manufactured concrete beams used for highway bridges and overpasses.

The fraud allegedly occurred between 1992 and 2007, when the FBI and U.S. Department of Transportation investigators raided the business. A 2008 indictment alleged that the business used a Connecticut shell company owned by a Filipino immigrant, Romeo P. Cruz, to fraudulently comply with a federal requirement that 10 percent of highway, bridge, and mass transit projects be contracted to small or minority-owned companies.

Cruz and Schuylkill executives Timothy G. Huber and Dennis F. Campbell pleaded guilty. Following a pretrial ruling that exposed him to a potential 25-year sentence if he proceeded to trial, Nagle's uncle and co-owner, Ernest G. Fink, also pleaded guilty. No one has been sentenced.

As Nagle's case proceeded to trial, his lawyers, Kristin Jones and Michael Schwartz, subpoenaed Fink, arguing that he was the only one who could confirm that Nagle was not involved in the fraud. The lawyers have alleged that because of family feuds, Fink and others did not like Nagle and kept him in the dark about many day-to-day business dealings.

Fink's lawyers, Ellen Brotman and Mark Sheppard, responded that Fink planned to invoke his Fifth Amendment right against self-incrimination. They argued that it would be unfair and unprecedented to force Fink to testify because, although he has pleaded guilty, he has yet to be sentenced. Several unresolved key facts, including the size of the fraud, are likely to play major factors in the length of Fink's sentence.

Nagle's lawyers asked Assistant U.S. Attorney Bruce Brandler to grant Fink immunity, but he declined. Nagle's lawyers then asked the judge to grant judicial immunity, arguing that Fink was a critical witness.

Last fall, U.S. District Judge Sylvia Rambo granted the request. Because Fink's testimony was "essential evidence," she ruled, Nagle's Sixth Amendment right to a fair trial trumped Fink's right to remain silent.

Prosecutors filed an emergency pretrial appeal.

In their eight-page opinion Wednesday, federal appeals Judges Theodore McKee, Marjorie O. Rendell, and Anthony Scirica ruled that they did not yet have jurisdiction to consider the issue. But they also noted that Rambo had not abused her discretion to make such a ruling, and they therefore would not stop her from compelling the testimony.

"We're gratified by the Third Circuit's ruling," said Nagle's lawyer Jones. The other lawyers in the case declined comment.

Contact staff writer John Shiffman at 301-320-6655 or jshiffman@phillynews.com.

comments powered by Disqus