Skelos Mem. of Law in Opp'n To Motions To Quash 3.23.18 PDF

Case 1:15-cr-00317-KMW Document 273 Filed 03/23/18 Page 1 of 40
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
UNITED STATES OF AMERICA,
- v. - S1 15 Cr. 317 (KMW)
DEAN SKELOS and ADAM SKELOS,
Defendants.
MEMORANDUM OF LAW IN OPPOSITION TO

MOTIONS TO QUASH SUBPOENAS SERVED ON
DFS, AFP, PRI, ANTHONY BONOMO, AND CARL BONOMO
Alexandra A.E. Shapiro

Eric S. Olney
Fabien Thayamballi
Shapiro Arato LLP
500 Fifth Avenue, 40th Floor
New York, New York 10110
(212) 257-4880
John J. Kenney
G. Robert Gage, Jr. Julian S. Brod
Gage Spencer & Fleming LLP Hoguet Newman Regal & Kenney, LLP
410 Park Avenue, Suite 900 10 East 40th Street
New York, New York 10022 New York, New York 10016
(212) 768-4900 (212) 689-8808
Attorneys for Dean Skelos Attorneys for Adam Skelos

TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES .......................................................................................................... ii
INTRODUCTION ...........................................................................................................................1
BACKGROUND .............................................................................................................................2
A. Anthony Bonomo Is A Key Trial Witness ............................................................................. 2
B. Bonomo Engaged In Egregious Misconduct And Hid It From The Government ................. 3
C. The Skeloses Issued Subpoenas And Negotiated For A Limited Subset Of Documents ...... 7
D. The Government Mischaracterizes The Interests At Stake.................................................... 8
ARGUMENT .................................................................................................................................11
I. THE SUBPOENAS SATISFY RULE 17 ............................................................................ 11
A. The Government Urges The Court To Apply The Wrong Legal Standard ................... 11
B. The Subpoenas Are Neither Unreasonable Nor Oppressive .......................................... 15
C. Rule 17(h) Does Not Apply To The Subpoenas ............................................................ 16
II. THE SUBPOENAS SATISFY THE NIXON STANDARD ................................................ 18
A. This Is Self-Evidently Not A “Fishing Expedition” ...................................................... 18
B. The Subpoenas Seek Relevant And Admissible Documents ......................................... 19
C. The Subpoenas Are Sufficiently Specific ...................................................................... 26
III. DFS’S ASSERTIONS OF PRIVILEGE ARE MERITLESS .............................................. 28
CONCLUSION ..............................................................................................................................32
i
TABLE OF AUTHORITIES
Page(s)
Cases
Adams v. Buffalo Pub. Sch.,

No. 13-cv-435A, 2014 WL 3882182 (W.D.N.Y. Aug. 7, 2014) ............................................... 29
Belth v. Muhl,
Index No. 119650/1995 (Sup. Ct. N.Y. Cnty. Apr. 30, 1996)................................................... 29
Bowman Dairy Co. v. United States,

341 U.S. 214 (1951) .................................................................................................................. 12
Camreta v. Greene,
563 U.S. 692 (2011) .................................................................................................................. 14
Frederick v. Civil Serv. Comm’n of Cty. of Schenectady,

175 A.D.2d 428 (3d Dep’t 1991)................................................................................................. 6
Hawkins v. Steingut,
829 F.2d 317 (2d Cir. 1987) ...................................................................................................... 14
In re Brooklyn Navy Yard Asbestos Litig.,

971 F.2d 831 (2d Cir. 1992) ...................................................................................................... 29
In re Irving,
600 F.2d 1027 (2d Cir. 1979) .................................................................................. 15, 19, 24, 31
In re Martin Marietta Corp.,

856 F.2d 619 (4th Cir. 1988) ..................................................................................................... 22
In re Refco, Inc. Sec. Litig.,

628 F. Supp. 2d 432 (S.D.N.Y. 2008) ....................................................................................... 14
In re The City of New York,

607 F.3d 923 (2d Cir. 2010). ..................................................................................................... 30
MacNamara v. City of New York,

249 F.R.D. 70 (S.D.N.Y. 2008) ........................................................................................... 30, 31
Ognibene v. Lagori,
No. 2:12-CV-01307-RCJ, 2013 WL 1007687 (D. Nev. Mar. 12, 2013)................................... 19
S.E.C. v. Oakford Corp.,

No. 00-cv-2426 (JSR) (HBP), 2001 WL 266996 (S.D.N.Y. Mar. 16, 2001) ............................ 19
S.E.C. v. Stratton Oakmont, Inc.,

No. 92 Civ. 1993 (JES), 1992 WL 226924 (S.D.N.Y. June 22, 1992) ..................................... 32
ii
S.E.C. v. Thrasher,
No. 92-cv-6987 (JFK), 1995 WL 46681 (S.D.N.Y. Feb. 7, 1995) ............................................ 32
United States v. Alvarez-Lopez,

559 F.2d 1155 (9th Cir. 1977) ................................................................................................... 23
United States v. Barnes,

No. S9 04-cr-186 SCR, 2008 WL 9359654 (S.D.N.Y. Apr. 2, 2008) ....................................... 28
United States v. Barnes,

560 F. App’x 36 (2d Cir. 2014) ........................................................................................... 14, 28
United States v. Bergstein,

No. 16-CR-746 (PKC), 2017 WL 6887596 (S.D.N.Y. Dec. 28, 2017)..................................... 14
United States v. Beverly,

5 F.3d 633 (2d Cir. 1993) .......................................................................................................... 22
United States v. Blum,

62 F.3d 63 (2d Cir. 1995) .......................................................................................................... 20
United States v. Boyle,

No. 08 CR 523 (CM), 2009 WL 484436 (S.D.N.Y. Feb. 24, 2009) ................................... 27, 28
United States v. Carollo,

No. 10-cr-654 (HB), 2012 WL 1195194 (S.D.N.Y. Apr. 9, 2012) ..................................... 19, 22
United States v. Cavender,

228 F.3d 792 (7th Cir. 2000) ..................................................................................................... 22
United States v. Cuadrado,

413 F.2d 633 (2d Cir. 1969) ...................................................................................................... 23
United States v. Cusick,

No. 11-CR-10066-LTS, 2011 WL 5036008 (D. Mass. Oct. 20, 2011) ..................................... 25
United States v. Garcia,

900 F.2d 571 (2d Cir. 1990) ...................................................................................................... 23
United States v. Graham,

555 F. Supp. 2d 1046 (N.D. Cal. 2008) ..................................................................................... 31
United States v. Holihan,

248 F. Supp. 2d 179 (W.D.N.Y. 2003)................................................................................ 20, 27
United States v. Hussain,

No. 16-CR-00462-CRB-1, 2018 WL 1091083 (N.D. Cal. Feb. 28, 2018) ............................... 17
iii
United States v. Iozia,

13 F.R.D. 335 (S.D.N.Y. 1952) ........................................................................................... 12, 25
United States v. Jasper,

No. 00-cr-825 (PKL), 2003 WL 1107526 (S.D.N.Y. Mar. 13, 2003) ....................................... 25
United States v. King,

194 F.R.D. 569 (E.D. Va. 2000) ................................................................................................ 25
United States v. LaRouche Campaign,

841 F.2d 1176 (1st Cir. 1988) ................................................................................................... 25
United States v. Leonard,

817 F. Supp. 286 (E.D.N.Y. 1992) ............................................................................................ 28
United States v. McClure,

Crim. A. No. 10-028, 2010 WL 3523030 (E.D. La. Sept. 1, 2010) .......................... 9, 10, 24, 27
United States v. Mejia,

655 F.3d 126 (2d Cir. 2011) ...................................................................................................... 32
United States v. Nachamie,

91 F. Supp. 2d 552 (S.D.N.Y. 2000) .................................................................................. passim
United States v. Neal,

No. 11-CR-00163-WJM, 2011 WL 3648381 (D. Colo. Aug. 18, 2011)................................... 24
United States v. Neal,

No. 11-CR-00163-WJM, 2011 WL 4829664 (D. Colo. Oct. 12, 2011) .................................... 25
United States v. Nektalov,

No. S2 03-cr-828 (PKL), 2004 WL 1574721 (S.D.N.Y. July 14, 2004)................................... 25
United States v. Newby,

251 F.R.D. 188 (E.D.N.C. 2008) ............................................................................................... 25
United States v. Nixon,

418 U.S. 683 (1974) ........................................................................................................... passim
United States v. 31-33 York St.,

930 F.2d 139 (2d Cir. 1991) ...................................................................................................... 29
United States v. Orena,

883 F. Supp. 849 (E.D.N.Y. 1995) ................................................................................ 20, 22, 24
United States v. Overton,

No. 15-CR-9S, 2017 WL 6262227 (W.D.N.Y. Dec. 6, 2017) .................................................. 27
iv
United States v. Pena,

No. 15-CR-551 (AJN), 2016 WL 8735699 (S.D.N.Y. Feb. 12, 2016) ..................................... 28
United States v. Rajaratnam,

753 F. Supp. 2d 317 (S.D.N.Y. 2011) ................................................................................ passim
United States v. Ramirez,

609 F.3d 495 (2d Cir. 2010) ...................................................................................................... 22
United States v. RW Prof’l Leasing Servs. Corp.,

228 F.R.D. 158 (E.D.N.Y. 2005)......................................................................................... 27, 28
United States v. Seijo,

514 F.2d 1357 (2d Cir. 1975) .................................................................................................... 23
United States v. Shackney,

31 F.R.D. 550 (D. Conn. 1962) ................................................................................................. 25
United States v. Shinderman,

432 F. Supp. 2d 157 (D. Me. 2006) ........................................................................................... 25
United States v. Soliman,

No. 06-cr-236A, 2009 WL 1531569 (W.D.N.Y. May 29, 2009) .............................................. 14
United States v. Stein,

488 F. Supp. 2d 350 (S.D.N.Y. 2007) ....................................................................................... 15
United States v. Treacy,

No. 08-cr-0366 (RLC), 2008 WL 5082884 (S.D.N.Y. Dec. 1, 2008) ....................................... 28
United States v. Tucker,

249 F.R.D. 58 (S.D.N.Y. 2008) ..................................................................................... 12, 13, 15
United States v. Ulbricht,

858 F.3d 71 (2d Cir. 2017) .................................................................................................. 14, 24
United States v. Vasquez,

258 F.R.D. 68 (E.D.N.Y. 2009)................................................................................................. 18
United States v. Wallach,

935 F.2d 445 (2d Cir. 1991) ...................................................................................................... 22
United States v. Weisberg,

No. 08-CR-347 NGG RML, 2011 WL 1327689 (E.D.N.Y. Apr. 5, 2011) ................... 19, 26, 27
United States v. Wey,

252 F. Supp. 3d 237 (S.D.N.Y. 2017) ........................................................................... 30, 31, 32
v
United States v. White,

No. 2:12-CR-00221, 2013 WL 1404877 (S.D.W. Va. Apr. 5, 2013) ....................................... 25
United States v. Wilson,

571 F. Supp. 1417 (S.D.N.Y. 1983) .......................................................................................... 29
United States v. Yian,

1995 WL 614563 (S.D.N.Y. Oct. 19, 1995)........................................................................ 18, 28
United States v. Young,

No. 03-20400 BV, 2004 WL 784840 (W.D. Tenn. Mar. 4, 2004) ............................................ 17
United States v. Yudong Zhu,

No. 13 CR. 761 (VM), 2014 WL 5366107 (S.D.N.Y. Oct. 14, 2014) ............................... passim
Statutes, Rules, and Other Authorities
18 U.S.C. § 3500 ........................................................................................................................... 17
N.Y. Ins. Law § 311 ...................................................................................................................... 29
N.Y. Pub. Off. Law § 87 ............................................................................................................... 29
Fed. R. Civ. P. 26 .......................................................................................................................... 14
Fed. R. Crim. P. 17 ................................................................................................................. 11, 16
Fed. R. Crim. P. 26.2 .................................................................................................................... 17
Fed. R. Evid. 401 .......................................................................................................................... 19
Fed. R. Evid. 402 .......................................................................................................................... 19
Fed. R. Evid. 608 .................................................................................................................... 22, 24
Fed. R. Evid. 801 .......................................................................................................................... 26
Fed. R. Evid. 803 .......................................................................................................................... 26

Order of the Supreme Court, 207 F.R.D. 89 (2002) ............................................................... 16, 17
Fed. R. Crim. P. 17 Advisory Committee Notes, 1979 Amendments .......................................... 17
Fed. R. Crim. P. 26.2 Advisory Committee Notes, 1979 Addition .............................................. 17
vi
INTRODUCTION
A state regulatory agency found that one of the government’s star witnesses, Anthony
Bonomo, engaged in rampant fraud and other misconduct in his management of PRI, a medical
malpractice insurance company at the center of this prosecution. This agency, the New York
Department of Financial Services (“DFS”), found that Bonomo cooked PRI’s books “and then
tried to cover it up by seeking to silence outside auditors and employees who objected to this
misconduct”; “engaged in self-dealing by using PRI to make so-called ‘charitable’ donations that
benefitted him personally”; “repeatedly and intentionally dissipated and wasted PRI assets”;
“abused the terms of [his] Management Agreement to [his] advantage at the expense of PRI”;
“repeatedly and consistently breached fiduciary . . . duties to PRI”; and generally “mismanaged
PRI to benefit [himself] at PRI’s expense.” As a result, DFS “revoked” Bonomo’s authorization
to manage PRI and “prohibited and barred” him from participation in PRI’s affairs.
If DFS’s factual findings are correct, Bonomo violated the express provisions of his non-
prosecution agreement with the government by concealing his past crimes against PRI and, in all
likelihood, continuing to commit serious crimes even after he signed that agreement.
None of this is disputed. Nevertheless, the government seeks to minimize DFS’s
findings, splitting hairs over whether DFS took “regulatory action” or “enforcement action,” and
pointing out that Bonomo is trying to litigate his way out of this mess. Given the magnitude of
Bonomo’s fraud and the potential harm it could cause to the insured doctors and their patients,
one would think these facts might trigger a grand jury investigation into mail and wire fraud as
well as perjury. Instead, anxious to cover for its star witness, the government refuses to
acknowledge that Bonomo’s egregious misconduct has any bearing on his credibility, his
incentives to testify, or his motivations for past conduct, and it accuses the Skeloses of trying to
“harass” Bonomo by issuing subpoenas for the evidence supporting DFS’s findings. The
government’s position reflects not only a disappointing unwillingness to confront the truth about
its witness, and but also, and far worse, a blatant attempt to conceal evidence undermining the
prosecution’s case and interfere with the defendants’ Sixth Amendment rights to present a
meaningful defense and their Fifth Amendment due process rights.
The motions to quash have no legal merit. The subpoenas specifically identify relevant
and admissible categories of documents. These documents are crucial to the defense, and they
are precisely the types of documents that criminal defendants are entitled to subpoena from third
parties. The Court should deny the motions and order the subpoena recipients to comply.
BACKGROUND
A. Anthony Bonomo Is A Key Trial Witness
As the Court is aware, Anthony Bonomo gave key testimony at the first trial about the
alleged PRI “scheme.” Bonomo is the owner and CEO of Administrators for the Professions,
Inc. (“AFP”), a for-profit company that manages the operations of PRI, a medical malpractice
insurer.1 The government accuses Dean Skelos of pressuring Anthony Bonomo to give his son
Adam a no-show job at PRI. In exchange, Dean Skelos allegedly met with PRI lobbyists and
agreed to support “extender” legislation that authorizes PRI to do business in New York even
though it operates with a negative capital balance. Thus, according to the government, the PRI
scheme was a corrupt agreement between Bonomo and Dean Skelos.
To induce Bonomo to testify against the Skeloses, the government entered into a non-
prosecution agreement with Bonomo dated July 17, 2015. (Shapiro Decl. Ex. B). This
agreement required Bonomo to “bring to [the government’s] attention all crimes which he has
1
Bonomo owns AFP “through AJB Ventures Inc., a subchapter S corporation, in which all
voting shares are controlled by Bonomo.” (Shapiro Decl. Ex. A at 5 ¶ 9).
2
committed” and to “commit no [further] crimes whatsoever.” (Id. at 1). The government warned
Bonomo that their agreement “d[id] not bind any . . . state or local prosecuting authority,” but it
assured him that it would “bring the cooperation of Bonomo to the attention of other prosecuting
offices, if [he so] requested.” (Id. at 2). Pursuant to this agreement, Bonomo testified against the
Skeloses in December 2015. His brother Carl Bonomo, also an AFP executive, met with the
government prior to trial but ultimately did not testify.
B. Bonomo Engaged In Egregious Misconduct And Hid It From The Government
DFS is a state regulatory agency with authority over the insurance industry, including
medical malpractice insurers such as PRI. In 2015, DFS began an examination of PRI that
initially covered the period from 2010 through 2014, but was later extended through at least
2017. (Shapiro Decl. Ex. A at 6 ¶¶ 14-15; Dkt. 265-1 ¶ 12). In the course of its examination,
DFS received document productions from PRI and AFP and conducted sixteen depositions. DFS
also served several parties with inquiries that resemble civil “interrogatories,” which those
parties answered in writing.
On July 6, 2017, nearly two years into the examination, the Superintendent of DFS issued
an order (the “DFS Order”) supported by detailed factual “findings.” (Shapiro Decl. Ex. A at 1,
4; Dkt. 265-1 ¶ 14).2 The DFS Order revealed that AFP and the Bonomos’ management of PRI
was, at bottom, a systematic campaign of fraud, embezzlement, self-dealing, and abuse of
fiduciary power. The evidence was firm and convincing enough for DFS to issue conclusive
findings and take drastic action for the immediate protection of PRI. Pursuant to its regulatory
authority, DFS ordered that AFP’s authority to manage PRI was “withdrawn and revoked,
2
DFS has made this Order publicly available: http://www.dfs.ny.gov/about/ea/ea170706.pdf.
3
effective immediately,” and that the Bonomos were “immediately prohibited and barred from
participation in [PRI’s] affairs.” (Shapiro Decl. Ex. A at 2-3 (emphasis in original)).
The DFS Order was supported by several sets of findings. First, DFS found that “[i]n
order to mask PRI’s true financial condition, Bonomo and AFP repeatedly caused PRI to set its
reserves at inadequate levels, and to inaccurately value its assets, despite clear evidence that such
levels and valuations were insufficient.” (Id. at 8 ¶ 30). They did this “to ensure that [DFS]
continued to approve the Management Agreement between PRI and AFP[,] . . . thereby enriching
AFP at PRI’s expense.” (Id.). When auditors and employees raised concerns, they were
punished. “AFP and the [Bonomos] caused the termination of both an outside auditor, and an
accounting employee of AFP, because of their objections to th[is] improper conduct.” (Id. at 9 ¶
34; see also id. at 10 ¶¶ 38-40). The conclusion was inescapable: AFP and the Bonomos faked
PRI’s numbers and “tried to cover it up by seeking to silence” anyone who posed a threat. (Id. at
1).
Second, AFP and the Bonomos “caus[ed] PRI to make approximately $3.35 million in
unauthorized charitable contributions [without Board approval] – many of which benefitted
Anthony Bonomo personally” and were “designed purely to promote the self-interest, reputation
and ego of Anthony Bonomo.” (Id. at 11 ¶¶ 42-43). To take but “[o]ne example: Bonomo, a big
fan of baseball, caused PRI to contribute $90,000 to one organization, which funded a
recreational baseball field that was named after Bonomo.” (Id. at 2). Even worse, “Bonomo
caused the vast majority of these self-dealing-style ‘charitable’ contributions to be made at a time
that Bonomo and AFP’s management caused PRI to be running a significant net loss in its
reserves.” (Id. at 12 ¶ 46).
4
Third, AFP and the Bonomos drafted their Management Agreement with PRI so that their
“compensation was based principally (and later exclusively) on the amount of premium written,
rather than on measures of PRI’s fiscal performance,” which led them to “enter into insurance
contracts” “regardless of the risks and costs to PRI” and “with little to no monitoring of the loss
ratios of the business being written . . . under AFP’s direction.” (Id. at 12 ¶¶ 47-48).
Fourth, AFP and the Bonomos “breached fiduciary and other duties by selecting and
recommending unqualified advisors and cronies for PRI’s investment advisory contracts.” (Id. at
13 ¶ 49). Bonomo “utterly failed to conduct any due diligence” on investment advisors, turning
“almost a billion dollars of PRI investments” to a man later “convicted . . . of fraud, conspiracy
and false statements,” which resulted in “significant financial losses” to PRI. (Id. at 13-14 ¶¶ 51-
56). Without board approval, Bonomo also caused PRI to hire another investment advisor who
was paid “well in excess of market rates” for services that were not “actually needed by PRI.”
(Id. at 15 ¶ 59).
Fifth, AFP and Bonomo “repeatedly and intentionally dissipated and wasted PRI assets,
and abused the terms of the Management Agreement to their advantage at the expense of PRI.”
(Id. at 15 ¶ 60). For example, they charged PRI for expenses that were AFP’s responsibility;
“caused PRI to engage in improper rebates, contracts and bookkeeping” to retain an institutional
subscriber; “sought to disguise the rebate as a ‘charitable contribution’” because it was a plain
“violation of the Insurance Law”; and refused to “refund approximately $4 million in
overpayments made by PRI to AFP.” (Id. at 15-16 ¶¶ 61-67).
Despite the plain language of Bonomo’s non-prosecution agreement, which required him
to disclose all crimes, Bonomo concealed this extensive misconduct from the government. As a
result, the Skeloses never had the opportunity to seek evidence on this subject or to cross-
5
examine Bonomo on it at the first trial. Moreover, given that some of the misconduct continued
at least into 2015, it appears that Bonomo continued to break the law even after he entered his
non-prosecution agreement. (Id. at 11 ¶¶ 44-45; id. at 16 ¶ 67).
The government observes that AFP and the Bonomos have filed an Article 78 proceeding
challenging the DFS Order and that the proceeding may not be resolved before the Skeloses’
trial. However, the only way that AFP and the Bonomos will prevail in their Article 78
proceeding is if the court determines that “the administrative decision is without a rational basis
and therefore arbitrary and capricious.” Frederick v. Civil Serv. Comm’n of Cty. of Schenectady,
175 A.D.2d 428, 429 (3d Dep’t 1991); see also id. at 430. That they dispute DFS’s findings does
not rob those findings of their weight, and it certainly does not suggest that the DFS Order is
referring to nonexistent evidence.
Indeed, PRI has conducted its own investigation concerning AFP’s management of its
affairs and corroborated DFS’s findings. (Shapiro Decl. Ex. C ¶¶ 5, 22-23; id. Ex. D at 6-9).3
Among other things, PRI found that, first, “AFP fraudulently and dishonestly caused PRI to issue
insurance policies to hospital customers at premium rates that were significantly below
actuarially justified premium rates,” and that AFP “continued this practice after becoming well
aware that it caused massive losses to PRI” because “AFP’s compensation was based solely on
the volume of premium collected.” Second, “AFP caused PRI to purchase structured settlement
annuities through a broker affiliated with AFP” and “fraudulently and dishonestly caused PRI to
pay the salaries of two of [the AFP affiliate’s] employees even though PRI derived no benefit
3
Exhibit C is the verified petition filed by PRI in PRI v. AFP, Index No. 606636/2017 (Sup. Ct.
Nassau Cty. July 11, 2017). This petition was verified under oath by Bruce C. Shulan, PRI’s
Chief Restructuring Officer. Exhibit D is Shulan’s affidavit in support of PRI’s order to show
cause for a TRO and preliminary injunction against AFP in that proceeding.
6
from their services.” Third, “AFP fraudulently and dishonestly caused PRI to make an illegal
premium rebate” of $900,000 “which was disguised as a charitable donation.” Fourth, “AFP
fraudulently and dishonestly caused PRI to pay a portion of the salaries of its senior executives
out of the funds of PRI” even though this was not permitted by the Management Agreement,
“result[ing] in more than $12 million being wrongfully paid to AFP by PRI.”4 Fifth, AFP has
failed to repay $1.5 million in advances charged to PRI “despite repeated demand by the Board
of Governors.” (Id. Ex. C ¶ 23(a)-(e); id. Ex. D at 7-9). As a result of this misconduct, PRI has
filed for arbitration and is seeking over $100 million in damages from AFP. (Id. Ex. F (PRI’s
demand for arbitration)).5
C. The Skeloses Issued Subpoenas And Negotiated For A Limited Subset Of Documents
There is, at a minimum, a strong basis to believe that DFS found compelling evidence
that Bonomo engaged in serious misconduct and violated his non-prosecution agreement. Last
month, the Skeloses issued subpoenas to the parties that produced that evidence to DFS—i.e.,
PRI, AFP, and the Bonomos—as well as DFS itself, intending to use that evidence at trial.
The subpoena recipients notified the government, which contacted counsel for the
Skeloses to negotiate on their behalf. During telephone conferences with the government, the
Skeloses discussed the possibility of narrowing the subpoenas in order to obtain a subset of the
4
Of this $12 million, Anthony Bonomo collected over $7.5 million and Carl Bonomo collected
over $1.1 million. (Shapiro Decl. Ex. E (exhibit 5 to Shulan’s affidavit in PRI v. AFP)).
5
Separately, we note that it is apparent that the DFS findings only scratch the surface of the
Bonomos’ misconduct, which, according to PRI’s estimates, generated over $100 million in
losses to PRI and/or ill-gotten gains for AFP. For example, Anthony Bonomo may have used
some of this money to make illegal straw donations to Governor Cuomo and former Nassau
County Executive Ed Mangano through members of Bonomo’s family. See Will Bredderman,
Strands of Scandal Keep Connecting Back to Top Cuomo Donor and Appointee, Observer (Oct.
27, 2016), http://observer.com/2016/10/strands-of-scandal-keep-connecting-back-to-top-cuomo-
donor-and-appointee/.
7
requested documents. (Gage Decl. ¶¶ 2-4). The Skeloses explained that there should be no
dispute as to their entitlement to documents that PRI and AFP produced to DFS, transcripts of the
depositions conducted by DFS, or answers to the DFS “interrogatories.” (Id.). All of these
documents were collected and compiled for production to DFS, meaning that the subpoena
recipients could simply send the same productions to the Skeloses. Nevertheless, the subpoena
recipients declined to produce even a subset of the documents and instead moved to quash the
subpoenas in their entirety.
For purposes of these motions, the Skeloses agree to narrow their subpoenas to cover
only the categories of documents identified in their negotiations with the subpoena recipients, as
well as an additional, limited category of communications from DFS.6 Specifically, for present
purposes, the Skeloses seek only the following four categories of documents: (1) documents that
PRI, AFP, and the Bonomos produced to DFS, (2) transcripts of the depositions conducted by
DFS, including the exhibits to those depositions, (3) the DFS “interrogatories” and the answers
provided, and (4) communications between DFS and the government. The Skeloses do not seek
internal DFS communications or memos, or any attorney-client privileged communications. The
documents that the Skeloses seek are relevant and admissible, and the subpoena recipients could
easily produce them with minimal burden. Again, the subpoena recipients already collected
virtually all of these documents during the DFS examination.
D. The Government Mischaracterizes The Interests At Stake
Claiming to act on behalf of the subpoena recipients as well as its “own substantial
interest in quashing the subpoenas,” the government filed a motion to quash. (Dkt. 258 (“Gov’t
6
While the subpoenas were proper as drafted, we have chosen to focus the litigation on the
documents that are the most essential and readily available, without prejudice to the Skeloses’
rights to obtain further documents in the future.
8
Mot.”) at 1). PRI joins the government’s motion (Dkt. 268 (“PRI Mot.”)), as do AFP and the
Bonomos (Dkt. 269). DFS has filed a separate motion to quash on grounds of privilege that are
specific to DFS. (Dkt. 265 (“DFS Mot.”)).
As the subpoena recipients have joined the government’s motion to quash, whether the
government has standing is a moot question. Cf. United States v. McClure, Crim. A. No. 10-028,
2010 WL 3523030, at *3 (E.D. La. Sept. 1, 2010) (“[C]ourts have routinely found that the
Government does not have the ability to stand in another’s shoes and move to quash a
subpoena. The Government cannot undertake to act as counsel to its witnesses.”) (quotation
marks and citation omitted). Nevertheless, the government’s assertions about its standing are
misleading, and its purported “interest” in the subpoenas requires a response.
The government’s professed “concern that the Subpoenas are improper fishing
expeditions intended to harass Government witnesses and related third parties” is meaningless
boilerplate. (Gov’t Mot. at 4). It is not even internally consistent: going on a “fishing
expedition” connotes a desire to find helpful evidence, not an “inten[t] to harass.” The
government never justifies its accusation that the subpoenas are “intended to harass.” Nor does it
explain how it has any interest whatsoever in protecting “related third parties” like DFS, PRI,
and AFP, who are not even “Government witnesses.”
The government’s “interest in preventing undue lengthening of the trial” and the
“prejudicial over-emphasis on [witness] credibility” is equally spurious. (Id. at 5 (quotation
marks omitted)). The government’s interest in a short trial would justify moving to quash every
defense subpoena, and severely undermine the constitutional right to present a meaningful
defense. The suggestion that there is something problematic about emphasizing witness
credibility is at odds with due process, the Confrontation Clause, and indeed the very idea that
9
trials are truth-seeking exercises, not simply one-sided show trials displaying only the
government’s version of events. And even if there were anything legitimate about these
“interests” in trial management, they would certainly not justify denying the defense access to
evidence several months before trial.
Next, assuming for the sake of argument that the government has a “proprietary” interest
in its external communications with third parties (id. at 4-5 & n.4), that would justify only a tiny
fraction of the government’s motion. The government’s overwhelming concern, of course, is
that DFS collected documents that make its star witness look bad. (Id. at 1 n.1, 4-5).
On that subject, the government claims it has an interest in preventing “an end-run
around the well-established protocols for obtaining [impeachment] material pursuant to . . .
Section 3500 as well as Giglio” and Rule 16. (Id. at 4). Those protocols, however, only apply to
material that is in the possession or control of the government. See McClure, 2010 WL 3523030,
at *4. Here, the Skeloses seek evidence from third parties, not the government, and “the
[g]overnment does not and cannot [possibly] represent that it has produced [or will produce] all
of the records called for in the subpoenas.” United States v. Nachamie, 91 F. Supp. 2d 552, 563
(S.D.N.Y. 2000). Whether the government takes its disclosure obligations “seriously” (Gov’t
Mot. at 8) or not is irrelevant. Fundamentally, the government objects to the Skeloses
“conduct[ing] [their] own far ranging investigation into the conduct of Government witnesses”
(id.) using tools that are designed to seek documents from third parties outside the control of the
government.7 Defense counsel have an obligation to investigate on behalf of their clients and are
7
This is not the first time the government has tried to argue that the government should be a
criminal defendant’s only source of information. See Nachamie, 91 F. Supp. 2d at 563 (“While
the Government . . . contends that this [subpoena] is . . . an ‘end run’ around Rule 16(a)(1), this
is simply not so.”).
10
not potted plants who merely wait for material spoon-fed from the government. The government
does not have all the necessary evidence, and it does not have much incentive to assist the
defense with trial preparation. If it did, by now it would have turned over the two DFS
deposition transcripts in its possession. (DFS Mot. at 11).
ARGUMENT
I. THE SUBPOENAS SATISFY RULE 17
A. The Government Urges The Court To Apply The Wrong Legal Standard
The motions to quash should be denied for several reasons. At the outset, the government
has provided no basis for its motion to quash because it applies the wrong legal standard to the
Skeloses’ subpoenas. Federal Rule of Criminal Procedure 17 governs the issuance of subpoenas
by the parties to a criminal proceeding. While the court has authority to “quash or modify [a]
subpoena,” it may do so only “if compliance would be unreasonable or oppressive.” Fed. R.
Crim. P. 17(c)(2) (emphasis added).
The government relies on Rule 17, but it does not attempt to show that the Skeloses’
subpoenas are “unreasonable or oppressive.” Rather, the government argues that “the documents
sought” by subpoena must be “(1) relevant, (2) admissible, and (3) specifically identified.”
(Gov’t Mot. at 5). The government is wrong. This three-part standard, which derives from the
Supreme Court’s decision in United States v. Nixon, 418 U.S. 683 (1974), does not apply here.
In Nixon, the grand jury investigating Watergate returned an indictment that named then-
President Nixon as an unindicted coconspirator. See id. at 687. The government then
subpoenaed the President, who moved to quash. The Supreme Court affirmed the denial of the
President’s motion, finding that the government’s subpoena “clear[ed] three hurdles” applied by
lower courts to criminal subpoenas: “(1) relevancy; (2) admissibility; [and] (3) specificity.” Id.
at 700.
11
Nixon adopted this standard from United States v. Iozia, 13 F.R.D. 335 (S.D.N.Y. 1952), a
case in which the defendant had subpoenaed the government. See id. at 337-38. Iozia required
the defendant to satisfy a heightened standard because, by serving a Rule 17 subpoena on the
government, he was potentially circumventing Rule 16’s limits on discovery from the
government. See id. at 338 (citing Bowman Dairy Co. v. United States, 341 U.S. 214, 220
(1951)). Nixon involved “the more unusual situation,” present here, “where the subpoena, rather
than being directed to the government by defendants [or vice versa], issues to . . . a third party.”
418 U.S. at 699 n.12 (quotation marks omitted). As a result, the government in Nixon argued
that the heightened standard in “Iozia does not apply in its full vigor where the subpoena . . . is
issued to third parties rather than to government prosecutors.” Id. The Supreme Court neither
accepted nor rejected this argument, instead declining to “decide whether a lower standard
exists” because the subpoena satisfied the more stringent standard. Id.
In the decades since Nixon, courts have split over whether subpoenas to third parties are
subject to that standard. The most thorough and persuasive analysis appears in United States v.
Tucker, 249 F.R.D. 58 (S.D.N.Y. 2008), where after an exegesis of criminal discovery law, the
court concluded that the Nixon standard should not blindly be applied to all subpoenas. See id. at
60-67. Unlike the government, a criminal defendant has a Sixth Amendment right to compulsory
process and to confront witnesses. “[T]he right to cross-examination has been held to be an
essential purpose of the Confrontation Clause,” and “[t]his right is meaningless if a defendant is
denied the reasonable opportunity to obtain material evidence that could be crucial to that cross-
examination.” Id. at 67 (quotation marks omitted). As the Supreme Court observed in rejecting
the President’s privilege objection to the subpoena in Nixon:
The right to the production of all evidence at a criminal trial . . . has constitutional
dimensions. The Sixth Amendment explicitly confers upon every defendant in a
12
criminal trial the right ‘to be confronted with the witnesses against him’ and ‘to
have compulsory process for obtaining witnesses in his favor.’ Moreover, the
Fifth Amendment also guarantees that no person shall be deprived of liberty
without due process of law. It is the manifest duty of the courts to vindicate those
guarantees, and to accomplish that it is essential that all relevant and admissible
evidence be produced.
418 U.S. at 711.
Moreover, the plain text of Rule 17 is not as restrictive as the Nixon standard, and
applying Nixon to third-party subpoenas would allow “the government [to] prevent defendants
from obtaining [relevant] material by choosing not to obtain it for itself” and thereby avoiding
any disclosure obligations—a “perverse result [that] cannot be intended by the Federal Rules of
Criminal Procedure.” Tucker, 249 F.R.D. at 65. Consequently, a defendant issuing a subpoena
to a non-party “need only show that the request is (1) reasonable, construed as ‘material to the
defense,’ and (2) not unduly oppressive for the producing party to respond.” Id. at 66;8 see also
Nachamie, 91 F. Supp. 2d at 561-63. Applying that standard, the court approved a subpoena
seeking recordings of phone calls made by cooperating witnesses for the purpose of impeaching
those witnesses at trial. See id. at 66-67.
Tucker’s logic is compelling, as several courts have recognized. In United States v.
Rajaratnam, 753 F. Supp. 2d 317 (S.D.N.Y. 2011), the court observed that according to the
government’s misreading of Nixon, “a defendant in a breach of contract case can call on the
power of the courts to compel third-parties to produce any documents ‘reasonably calculated to
lead to the discovery of admissible evidence,’ . . . [but] a defendant on trial for his life or liberty
8
While Tucker noted that the subpoena in that case was issued “on the eve of trial,” id. at 66, the
rationales for refusing to extend Nixon to defense subpoenas to third parties apply regardless of
when the subpoena is issued. Indeed, the Tucker court recognized that in Nachamie, it had
“suggest[ed] that this test [wa]s appropriate for all defense subpoenas directed to non-parties.”
Id. at 66 n.51 (citing Nachamie, 91 F. Supp. 2d at 563) (emphasis added).
13
does not even have the right to obtain documents ‘material to his defense’ from those same third-
parties.” Id. at 321 n.1 (quoting Fed. R. Civ. P. 26 (b)(1)). The court in Rajaratnam had no
occasion to apply Tucker, as the subpoena at issue satisfied Nixon. In United States v. Soliman,
No. 06-cr-236A, 2009 WL 1531569 (W.D.N.Y. May 29, 2009), however, the court applied
Tucker in granting the defendant’s motion for pretrial subpoenas, holding that even if the
documents sought were “potentially voluminous,” there was a reasonable “connection between
his requests and his defense,” and the subpoena could be further tailored if necessary to mitigate
the burden of responding. Id. at *4.
Like the court in Tucker, this Court should apply the standard set forth in the plain text of
Rule 17(c). As the cases above indicate, there is no binding precedent requiring the Court to
extend Nixon to this case.9 The district-court decisions cited by the government do not bind this
Court, see Camreta v. Greene, 563 U.S. 692, 709 n.7 (2011), which “remain[s] free to disagree”
with them, Hawkins v. Steingut, 829 F.2d 317, 321 (2d Cir. 1987). In fact, “every federal court in
the land is obliged to apply . . . federal law, interpreted as best that court can in light of the
precedents that bind it.” In re Refco, Inc. Sec. Litig., 628 F. Supp. 2d 432, 439 (S.D.N.Y. 2008)
(Lynch, J.) (emphasis added). “[I]f a federal court simply accepts the interpretation of another
[court] without independently addressing the merits, it is not doing its job.” Id. (quotation marks
9
In the only Second Circuit decision that directly addresses Tucker, the Court declined to decide
whether Tucker or Nixon applied to a defense subpoena to a third party because the defendant’s
showing failed to satisfy Tucker. See United States v. Barnes, 560 F. App’x 36, 40 n.1 (2d Cir.
2014). More recently, the Second Circuit recited the Nixon standard in United States v. Ulbricht,
858 F.3d 71 (2d Cir. 2017), but the defendant did not advocate for (or even cite) the Tucker
standard, and the Court’s reference to Nixon was dicta, since it did not actually rely on the Nixon
standard. Rather, it found that the evidence sought was irrelevant and could compromise a grand
jury investigation, and that its exclusion was harmless. See id. at 109-10. The most recent case
addressing Tucker confirms there is no binding precedent on this issue. See United States v.
Bergstein, No. 16-CR-746 (PKC), 2017 WL 6887596, at *4 (S.D.N.Y. Dec. 28, 2017).
14
and original brackets omitted). “Nixon should not so readily be divorced from the concerns that
produced it,” and “it is vitally important” not to “let [its] frequent repetition . . . lead to mindless
application in circumstances [where it] never was intended to apply.” Rajaratnam, 753 F. Supp.
2d at 321 n.1 (quoting United States v. Stein, 488 F. Supp. 2d 350, 365 (S.D.N.Y. 2007)). As
explained above, Nixon is distinguishable on several grounds. Indeed, “the considerations
supporting disclosure in the case at bar are even stronger than those in Nixon in that the rights of
defendants are at stake rather than the interests of the prosecution.” In re Irving, 600 F.2d 1027,
1036 (2d Cir. 1979).10
B. The Subpoenas Are Neither Unreasonable Nor Oppressive
The Skeloses’ subpoenas easily satisfy the Rule 17(c) standard. First, the subpoenas are
plainly not “unreasonable,” as they seek evidence “material to the defense.” Tucker, 249 F.R.D.
at 66. As explained more fully below, evidence of Bonomo’s misconduct at PRI supports the
defense for several independent reasons. It is exculpatory, since (as explained more fully at
Point II.B infra), it provides an alternative explanation for why Bonomo would want to remain in
Dean Skelos’s good graces by keeping Adam Skelos employed. It is evidence of bias, since it
shows that Bonomo has an incentive to lie about the Skeloses in order to curry favor with the
government. And even if the evidence merely showed that Bonomo is a liar, that would be
sufficient, since “[i]mpeachment of the cooperators is clearly material to [the] defense.” Id. The
Sixth Amendment right to cross-examination depends on “obtain[ing] material evidence that
could be crucial to that cross-examination.” Id. at 67. The evidence sought by the Skeloses
plainly serves that function. It is difficult to imagine how defense counsel would be able to
10
Irving analyzed a third-party subpoena under the Nixon standard, but apparently no party in
that case advocated for a different standard, so the issue was not squarely presented. In any
event, the Court allowed the subpoena, so adopting Tucker would not change the result in Irving.
15
conduct an effective cross-examination of Bonomo—an expert in PRI’s affairs and in concealing
his own misconduct—without using the documents underlying DFS’s findings to educate
themselves about his schemes and pin him down with precise questioning.
Second, the subpoenas are in no way “oppressive.” As explained above, the Skeloses
seek only four categories of documents related to the DFS examination: (1) documents that PRI,
AFP, and the Bonomos produced to DFS, (2) transcripts of the depositions conducted by DFS,
including exhibits, (3) the DFS “interrogatories” and their answers, and (4) communications
between DFS and the government. All of these documents are readily identifiable and could be
produced to the Skeloses today, if the subpoena recipients were willing. PRI, AFP, and the
Bonomos obviously kept a copy of everything they submitted to DFS, and DFS obviously has a
separate file containing all of that information. That is why the government relies on sleight of
hand, arguing that the subpoenas are “overbroad” rather than “burdensome.” As narrowed, the
subpoenas are neither, and the Court should deny the motions to quash.
C. Rule 17(h) Does Not Apply To The Subpoenas
The government quotes only one part of Rule 17 in its motion: Rule 17(h), which
provides that “[n]o party may subpoena the statement of a witness or of a prospective witness
under this rule. Rule 26.2 governs the production of the statement.” Fed. R. Crim. P. 17(h). The
government suggests that this provision forbids the Skeloses from obtaining transcripts of
Bonomo’s deposition testimony to DFS. (Gov’t Mot. at 5). But Rule 17(h) does nothing of the
sort—it only prevents the Skeloses from subpoenaing the government to obtain witness
statements in its possession. Statements in the possession of third parties like DFS are fair game.
As originally enacted, Rule 17(h) provided that “[s]tatements made by witnesses or
prospective witnesses may not be subpoenaed from the government or the defendant under this
rule, but shall be subject to production only in accordance with the provisions of Rule 26.2.”
16
Order of the Supreme Court, 207 F.R.D. 89, 440 (2002) (emphasis added). When this provision
was amended to its current version in 2002, its language was no longer explicit. See id. But the
Advisory Committee made clear that this “change[] [was] intended to be stylistic only,” and was
simply “part of the general restyling of the Criminal Rules to make them more easily understood
and to make style and terminology consistent throughout the rules.” Id. at 443 (emphasis added).
In other words, even after the 2002 amendment, Rule 17(h) forbids subpoenas of witness
statements only “from the government or the defendant.”11
Rule 17(h) therefore does not prevent a defendant from subpoenaing witness statements
from a party other than the government. See United States v. Hussain, No. 16-CR-00462-CRB-
1, 2018 WL 1091083, at *2 (N.D. Cal. Feb. 28, 2018) (Rule 17(h) does “not reflect an intention
to make third-party witness statements undiscoverable”); United States v. Young, No. 03-20400
BV, 2004 WL 784840, at *2 (W.D. Tenn. Mar. 4, 2004) (Rule 17(h) “only appl[ies] to witness
11
The structure of the Federal Rules confirms this. Rule 17(h) refers to Rule 26.2, which
provides that “[a]fter a witness other than the defendant has testified on direct examination,” the
party who called the witness must “produce, for the examination and use of the [other] party, any
statement of the witness that is in their possession and that relates to the subject matter of the
witness’s testimony.” Fed. R. Crim. P. 26.2(a) (emphasis added). This Rule implements the
Jencks Act, which requires the government to produce witness statements “in [its] possession”
only after the witness has “testified on direct examination.” 18 U.S.C. § 3500(a), (b) (emphasis
added); accord Rule 26.2 Advisory Committee Notes, 1979 Addition. Neither the Jencks Act nor
Rule 26.2 imposes any restrictions or obligations regarding statements that are in the possession
of third parties. Thus, if Rule 17(h) were as broad as the government suggests, the defendant
could never obtain prior witness statements that the government chose not to obtain for itself.
That is clearly not the purpose of Rule 17(h), however, which was adopted only to prevent the
parties from circumventing Rule 26.2. See Rule 17 Advisory Committee Notes, 1979
Amendments (“Th[e] addition [of paragraph (h)] to rule 17 [wa]s necessary in light of proposed
rule 26.2 . . . .”). Given the procedure set forth in Rule 26.2 and the Jencks Act, the parties could
not be allowed to subpoena each other for witness statements before trial. By contrast,
subpoenas issued to third parties do not contravene Rule 26.2 or the Jencks Act and are thus
permissible.
17
statements in the government’s possession”).12 The Skeloses may subpoena Bonomo’s prior
statements from DFS or any third party that possesses copies of the transcripts.
II. THE SUBPOENAS SATISFY THE NIXON STANDARD
Even under the more restrictive Nixon standard, the motions to quash are meritless. As
narrowed by the parties’ negotiations, the subpoenas easily clear the “three hurdles” of “(1)
relevancy; (2) admissibility; [and] (3) specificity.” Nixon, 418 U.S. at 700.
A. This Is Self-Evidently Not A “Fishing Expedition”
Throughout its motion, the government mischaracterizes the subpoenas as a “fishing
expedition” “meant to harass” its witnesses, and it argues that this “alone” is a sufficient basis to
quash the subpoenas. (E.g., Gov’t Mot. at 5-6 (citing United States v. Yian, 1995 WL 614563, at
*2 (S.D.N.Y. Oct. 19, 1995)). Not to mince words, but this is ludicrous. After a thorough
examination, DFS found that the Bonomos, through AFP, had engaged in serious misconduct in
their management of PRI. As a result, DFS issued an order revoking their authority to manage
PRI and prohibited them from participating in PRI’s affairs. The Skeloses are not asking to
rummage through investigative files based on pure speculation, or the mere hope that they might
find something useful. See Point II.C infra (distinguishing Yian and similar cases). From the
DFS Order, we know that there is strong evidence of misconduct; we simply do not have access
to it. Furthermore, it is unclear how seeking the production of these documents, which were
already collected and packaged for production to DFS, could possibly “harass” the Bonomos.
12
While certain courts have extended Rule 17(h) to witness statements in the possession of third
parties, they contain no justification whatsoever and do not address the arguments presented
here. See United States v. Yudong Zhu, No. 13 CR. 761, 2014 WL 5366107, at *3 & n.3
(S.D.N.Y. Oct. 14, 2014) (citing United States v. Vasquez, 258 F.R.D. 68, 73 (E.D.N.Y. 2009)).
18
The government’s repeated deployment of clichés13 does not change the fact that, as explained
below, the Skeloses’ subpoenas satisfy every prong of the Nixon standard.
B. The Subpoenas Seek Relevant And Admissible Documents
Nixon’s relevance and admissibility requirements are not onerous. Evidence is “relevant”
if it tends to “make a fact more or less probable,” and “the fact is of consequence in determining
the action.” Fed. R. Evid. 401. All relevant evidence is presumptively admissible. See Fed. R.
Evid. 402. Despite the government’s suggestion to the contrary (Gov’t Mot. at 5), the Skeloses
need only show that the evidence could potentially serve a valid purpose. See Nixon, 418 U.S. at
702 (subpoena was proper where there were “valid potential evidentiary uses for the [requested]
material”) (emphasis added); id. at 699 n.11 (advisory committee drafted Rule 17 “for the
purpose . . . of enabling the party to see whether he can use [the evidence] or whether he wants
to use [it]”) (quotation marks omitted) (emphasis added); Irving, 600 F.2d at 1034 (subpoena for
union sign-up cards was permissible because “[i]f the cards are in fact forged or otherwise
fraudulent, they may provide the defendants with a basis for asserting an entrapment defense”)
(emphasis added); United States v. Yudong Zhu, No. 13 CR. 761 (VM), 2014 WL 5366107, at *2-
3 (S.D.N.Y. Oct. 14, 2014) (subpoena may properly seek documents that are “potentially
admissible”); United States v. Carollo, No. 10-cr-654 (HB), 2012 WL 1195194, at *2 (S.D.N.Y.
Apr. 9, 2012) (subpoena is proper “if a document is arguably relevant and admissible”)
(quotation marks omitted); United States v. Weisberg, No. 08-CR-347 (NGG) (RML), 2011 WL
1327689, at *7 (E.D.N.Y. Apr. 5, 2011) (upholding subpoena of “records likely to contain helpful
13
See S.E.C. v. Oakford Corp., No. 00-cv-2426 (JSR) (HBP), 2001 WL 266996, at *2 (S.D.N.Y.
Mar. 16, 2001) (few expressions are as “hackneyed and meaningless as ‘fishing expedition’”);
Ognibene v. Lagori, No. 2:12-CV-01307-RCJ, 2013 WL 1007687, at *3 (D. Nev. Mar. 12, 2013)
(there is no “fishing expedition” if the party “ha[s] already ‘caught a fish’”).
19
documents”); Rajaratnam, 753 F. Supp. 2d at 321 n.1, 323 (“potential evidentiary uses” satisfy
“the ‘admissibility’ requirement”); Nachamie, 91 F. Supp. 2d at 564 (subpoenas may seek
documents “likely to be admissible at trial”); United States v. Orena, 883 F. Supp. 849, 868
(E.D.N.Y. 1995) (approving subpoena of records that were “at least potentially admissible” and
that “might also form the basis for eliciting certain testimony at trial”).
The government’s main argument is that the subpoenas are “thinly veiled attempts to seek
potential impeachment material for Anthony Bonomo,” which is supposedly neither relevant nor
admissible. (Gov’t Mot. at 7). Both the premise and conclusion of this argument are wrong.
The evidence sought is admissible for several purposes other than impeachment, and regardless,
the subpoenas would be valid even if they only sought impeachment material.
1. Bonomo’s misconduct is relevant primarily because it provides an alternative
explanation for his favors to Adam Skelos that tends to exculpate the Skeloses. The government
argues that Dean Skelos extorted favors from Bonomo in exchange for his support for extender
legislation critical to PRI. However, at the time, Bonomo’s past and ongoing misconduct at PRI
exposed him to potential debarment and criminal prosecution. He could easily have thought that
powerful friends might be able to help him defend against any investigation into his misconduct,
giving him a strong incentive to curry favor with politicians like Dean Skelos. As a result, the
evidence of Bonomo’s misconduct helps to show that his favors to Adam Skelos were intended
to cultivate goodwill, rather than any corrupt agreement regarding the extender legislation.
This theory of relevance is unrelated to Bonomo’s credibility as a witness, and by itself, it
is a proper basis for seeking the evidence by subpoena. See United States v. Holihan, 248 F.
Supp. 2d 179, 183-87 (W.D.N.Y. 2003) (bank employee accused of embezzlement could
subpoena other employees’ records not to impeach their testimony, but rather to establish their
20
potential motive or ability to commit the crime); cf. United States v. Blum, 62 F.3d 63, 67-68 (2d
Cir. 1995) (evidence of witness’s potential misconduct should have been admitted at trial
because it was not merely impeachment material but also showed that the witness had a
“personal motive” to engage in conduct inconsistent with the defendant’s guilt).
2. In addition, Bonomo’s misconduct gives him several reasons to lie about the
Skeloses’ conduct and his own intentions. First, once Bonomo was drawn into the Skelos
investigation, he had a strong incentive to lie to federal prosecutors. Giving the prosecutors what
they wanted helped Bonomo to divert attention from his own misconduct. Conversely, failing to
be sufficiently “helpful” might have invited greater scrutiny of his dealings.14 It was
advantageous to falsely confess to bribing Skelos to support the extender legislation, because
Bonomo received immunity from prosecution for that crime. It would not have helped him,
however, to tell federal prosecutors that his misconduct at PRI led him to confer favors on Adam
Skelos. Second, Bonomo could have thought that currying favor with the U.S. Attorney’s Office
would help him avoid prosecution in the future if his misconduct at PRI came to light. Third,
now that Bonomo has testified falsely at Skelos’s trial and DFS has discovered his misconduct at
PRI, Bonomo has an incentive to continue the lie and avoid confessing to perjury.
Evidence of Bonomo’s misconduct is therefore admissible to show that he has a motive
to testify falsely in this case. This is not “impeachment” in the sense the government uses that
term, which is apparently based on Federal Rule of Evidence 608(b). (Gov’t Mot. at 6). That
14
Bonomo’s trial testimony confirms this: “Q. But you were concerned, were you not, that the
United States Attorney’s Office was doing this investigation, correct? A. Yes. Q. And you
were concerned how you might get caught up in their investigation, correct? A. Yes.
Q. Because it had gotten a lot of publicity, right? A. Yes. Q. You were aware at the time this
agreement was signed that they had brought charges against Senator Skelos, correct?
A. Correct. Q. And you didn’t want to have a part of that, correct? A. Correct.” (Tr. 1998).
21
Rule limits the use of “extrinsic evidence” to “attack or support the witness’s character for
truthfulness.” Fed. R. Evid 608(b). But evidence that a witness has a general propensity to lie is
different from evidence that a witness has a specific motive to lie in this case. Courts regularly
permit Rule 17 subpoenas seeking the latter type of evidence. See In re Martin Marietta Corp.,
856 F.2d 619, 622 (4th Cir. 1988) (defendant could subpoena evidence that his employer “hung
him out to dry while protecting its own interest”); Yudong Zhu, 2014 WL 5366107, at *5
(denying motion to quash subpoena seeking evidence of witness bias); Carollo, 2012 WL
1195194, at *1-3 (subpoena could seek evidence that cooperator transferred money to Swiss
banks before pleading guilty, which suggested a motive “to cooperate with the government” in
order to “protect assets” or “guard against additional charges for other crimes”); Orena, 883 F.
Supp. at 869 (subpoena could seek evidence that “illuminate[s] the factors which led [an
individual] to become a prosecution witness and the benefits he obtained by doing so”).
3. Evidence of Bonomo’s misconduct is also relevant and admissible to contradict
his specific trial testimony and show that he testified falsely. The “impeachment by
contradiction” doctrine “provides that when a witness puts certain facts at issue in his testimony,
[a party] may seek to rebut those facts, including by resorting to extrinsic evidence.” United
States v. Ramirez, 609 F.3d 495, 499 (2d Cir. 2010). This “impeachment of specific falsehoods”
is not an “attack on [the witness’s] general character for truthfulness” and therefore falls outside
Rule 608(b)). United States v. Beverly, 5 F.3d 633, 639 (2d Cir. 1993). In fact, the Courts of
Appeals regularly vacate convictions where defendants were prevented from presenting extrinsic
evidence showing that a witness testified falsely, even about some fact unrelated to the charges.
See United States v. Wallach, 935 F.2d 445, 455-59 (2d Cir. 1991) (evidence that key witness had
lied about his gambling habit); United States v. Cavender, 228 F.3d 792, 798-99 (7th Cir. 2000)
22
(evidence that cooperator had lied about his history of drug use); United States v. Seijo, 514 F.2d
1357, 1363-65 (2d Cir. 1975) (witness’s undisclosed perjury about prior conviction).15
Here, Bonomo’s testimony at the first trial was inconsistent with the evidence of his
misconduct at PRI. In describing the rationale behind the extender legislation, which authorizes
PRI to operate with a negative capital balance, Bonomo testified that “these laws were put into
effect to prevent us from looking like bad companies because of state action,” since “no one
would pass [the test for required capital] because we know that the rates are set artificially low.”
(Tr. 1904). He went on to explain that the extenders were important because “the threat is we
could be put into liquidation for no fault of anything that we have done.” (Tr. 1904-05). This
testimony suggests that if the extenders did not pass, PRI would have insufficient capital to meet
regulatory requirements for reasons over which Bonomo had no control.
The DFS Order flatly contradicts this testimony. DFS found that “[i]n order to mask
PRI’s true financial condition, Bonomo and AFP repeatedly caused PRI to set its reserves at
inadequate levels, and to inaccurately value its assets, despite clear evidence that such levels and
valuations were insufficient.” (Shapiro Decl. Ex. A at 8 ¶ 30). “For example, in 2009, AFP
established a net loss reserve for PRI of approximately $1.2 billion. This was $407 million less
than the net loss reserve recommended by PRI’s independent actuary. In other words, AFP
caused PRI to understate its loss reserve by approximately 30 percent.” (Id. ¶ 31). In addition,
AFP failed to monitor the “loss ratios” of the business it wrote for PRI because, given the terms
15
See also United States v. Garcia, 900 F.2d 571, 575-76 (2d Cir. 1990) (district court properly
admitted evidence that defendant had lied about prior arrests); United States v. Cuadrado, 413
F.2d 633, 635-36 (2d Cir. 1969) (district court properly admitted evidence that defendant had
lied about uncharged drug transactions); cf. United States v. Alvarez-Lopez, 559 F.2d 1155,
1157-58 (9th Cir. 1977) (district court improperly restricted cross-examination regarding
informant’s lies about past arrests).
23
of the contract between AFP and PRI, “there was every incentive for AFP to write as many
policies as possible, regardless of the risks and costs to PRI.” (Id. at 12 ¶¶ 47-48). The other
findings concerning Bonomo’s mismanagement, misuse of funds, and breaches of fiduciary
duties to PRI are similarly relevant to PRI’s financial condition. And the evidence underlying all
of these findings is necessary to show that Bonomo did, in fact, testify falsely. It is therefore the
proper subject of a Rule 17 subpoena.
4. Finally, the Skeloses are entitled to subpoena evidence of Bonomo’s misconduct
even if its only function is to show that Bonomo is generally a liar. While the Skeloses may not
be able to offer this material as extrinsic evidence of Bonomo’s dishonesty, they can certainly
use it as a basis for probing Bonomo’s credibility on cross-examination. See Fed. R. Evid.
608(b)(1); United States v. Ulbricht, 858 F.3d 71, 108 (2d Cir. 2017) (“character for truthfulness”
of “government witness” is necessarily “at issue during the trial, and information that
impeache[s] his credibility [is] highly relevant”). This is a valid purpose for a Rule 17 subpoena.
See Irving, 600 F.2d at 1034 (approving subpoena of union cards possibly forged by witness
because “defendants could certainly utilize the cards in attempting to impeach [his] credibility”);
McClure, 2010 WL 3523030, at *1-2 (denying motion to quash subpoena seeking personnel files
of police officer witnesses because “information pertaining to their credibility [wa]s certainly
relevant” and not barred by Rule 608(b)); cf. Orena, 883 F. Supp. at 868 (approving subpoena of
records that “might . . . form the basis for eliciting certain testimony”). Indeed, courts regularly
allow defendants to subpoena impeachment evidence of this sort.16
16
See United States v. Neal, No. 11-CR-00163-WJM, 2011 WL 3648381, at *3-4 (D. Colo. Aug.
18, 2011) (denying motion to quash subpoena seeking personnel file of officer who claimed he
had probable cause to search the defendant’s vehicle because “credibility [would] be the key
issue” at the suppression hearing, and “the materials from his personnel files will be admissible
24
The government’s cases are not to the contrary. (Gov’t Mot. at 5, 7). At most, they
suggest that “impeachment” materials usually should not be sought “in advance of trial.” United
States v. Nektalov, No. S2 03-cr-828 (PKL), 2004 WL 1574721, at *2 (S.D.N.Y. July 14, 2004);
United States v. Jasper, No. 00-cr-825 (PKL), 2003 WL 1107526, at *2 (S.D.N.Y. Mar. 13,
2003); Iozia, 13 F.R.D. at 340. Supposedly this is because “the admissibility of impeachment
evidence cannot be fully assessed until the corresponding witness testifies at trial.” Yudong Zhu,
2014 WL 5366107, at *5 (quotation marks omitted).17 That rationale does not apply here,
however, because we know that Bonomo will testify, and we know the substance of his
testimony from the first trial. Under these circumstances, a defendant need not wait until trial to
seek impeachment material. See, e.g., United States v. LaRouche Campaign, 841 F.2d 1176,
1180 (1st Cir. 1988) (permitting pretrial subpoena of impeachment evidence “where a putative
key witness, whose general testimony is already known, is scheduled to testify”); United States v.
King, 194 F.R.D. 569, 574-75 (E.D. Va. 2000) (same).18
* * *
for impeachment purposes, if nothing else”); United States v. Neal, No. 11-CR-00163-WJM,
2011 WL 4829664, at *2-3 (D. Colo. Oct. 12, 2011) (same, as to subpoena of another officer’s
personnel file before trial); United States v. Cusick, No. 11-CR-10066-LTS, 2011 WL 5036008,
at *1 (D. Mass. Oct. 20, 2011) (denying motion to quash subpoena for documents that could be
used to impeach witness’s credibility); United States v. Newby, 251 F.R.D. 188, 190 (E.D.N.C.
2008) (granting request to subpoena police department’s standard operating procedures for
purposes of impeachment).
17
This purported rule does not apply to evidence of bias or a motive to lie. See id.
18
See also United States v. White, No. 2:12-CR-00221, 2013 WL 1404877, at *5-6 (S.D.W. Va.
Apr. 5, 2013), rev’d on other grounds sub nom. Kinder v. White, 609 F. App’x 126 (4th Cir.
2015); United States v. Shinderman, 432 F. Supp. 2d 157, 160 (D. Me. 2006); cf. United States v.
Shackney, 31 F.R.D. 550, 552 (D. Conn. 1962).
25
The government’s remaining arguments about admissibility address only limited
categories of documents, most of which are irrelevant. As explained above, the Skeloses have
narrowed the scope of their subpoenas to seek only certain types of documents. The Skeloses do
not, for example, seek “internal DFS communications about the examination” or “mental
impressions and internal work product of DFS attorneys.” (Gov’t Mot. at 6). Nor do the
Skeloses seek, at this time, “documents and communications” from the Bonomos other than what
they have already produced to DFS. (Id. at 7).19 Indeed, we did not even press for any such
documents in our negotiations with the government and DFS.
The documents sought by the Skeloses are primarily business records evidencing the
Bonomos’ misconduct. See Fed. R. Evid. 803(6); Yudong Zhu, 2014 WL 5366107, at *3 (Nixon
standard satisfied where the “documents would likely qualify as business records”); Weisberg,
2011 WL 1327689, at *7 (same); Nachamie, 91 F. Supp. 2d at 564 (same). In some cases, they
may be public records. See Fed. R. Evid. 803(8). The government’s communications with DFS
are admissible as party-opponent admissions. See Fed. R. Evid. 801(d)(2). And to the extent any
of the material requested is not itself admissible, it can nevertheless be used for cross-
examination. There is no basis to quash the subpoenas on admissibility grounds.
C. The Subpoenas Are Sufficiently Specific
There is no basis to quash the subpoenas on specificity grounds, either. “[A] defendant
need not have prior knowledge of specific documents to meet the specificity requirement of Rule
17(c).” Weisberg, 2011 WL 1327689, at *7; accord Rajaratnam, 753 F. Supp. 2d at 321 n.1
19
To the extent any of this is 3500 material produced for the first trial (the government provides
only one example, see id. at 7 n.6), the Bonomos need not produce it a second time, but we
imagine that it will be more burdensome for them to compare their productions to DFS and to the
government and remove the overlapping material.
26
(“requiring the defendant to specify precisely the documents he wants without knowing what
they are” would “render[] Rule 17 a nullity”). Rather, if the defendant identifies “a group of
records likely to contain helpful documents,” his request is sufficiently specific, and “he cannot
be said to be engaging in a ‘fishing expedition.’” Weisberg, 2011 WL 1327689, at *7. This is
especially so if “there is no indication” that “the production of [the] documents” identified
“would require [the subpoena recipient] to allocate significant resources in order to comply.”
Yudong Zhu, 2014 WL 5366107, at *6; see also McClure, 2010 WL 3523030, at *2 (specificity
requirement focuses on “undue cost, burden, or delay associated with excessively broad
requests”); Holihan, 248 F. Supp. 2d at 188 (subpoena was “sufficiently specified” since the
recipient could “easily” locate the evidence); cf. United States v. RW Prof’l Leasing Servs. Corp.,
228 F.R.D. 158, 164 (E.D.N.Y. 2005) (subpoena insufficiently specific where it “could amount to
a massive search for countless documents, at great expense to [the subpoenaed company]”).20
As explained above, the Skeloses seek only four specific categories of documents. These
documents are critical to the defense. See Point II.A-B supra. They are readily identifiable, and
their production will not be burdensome in the least. See Point I.B supra. Accordingly, this case
is nothing like the “specificity” cases cited by the government and PRI. The government and
PRI cite only the conclusions of these (non-binding) cases, ignoring the facts that make them
inapposite. (Gov’t Mot. at 6-7; PRI Mot. at 2).
 In several cases, the defendants requested all law-enforcement records concerning the
defendants or their crimes, including internal agency documents, and offered no reason to
believe they would contain helpful information. See United States v. Overton, No. 15-
CR-9S, 2017 WL 6262227, at *2 (W.D.N.Y. Dec. 6, 2017); United States v. Boyle, No. 08
20
While the government asserts that subpoenas seeking “any” or “all” documents of a particular
type are necessarily suspect (Gov’t Mot. at 6-7), that is not the law. See, e.g., Yudong Zhu, 2014
WL 5366107, at *5-6 (subpoena seeking “[a]ny correspondence” about the defendant was
sufficiently specific, when limited by date); Rajaratnam, 753 F. Supp. 2d at 322-23 (subpoena
seeking “[a]ll documents or other communications” was sufficiently specific).
27
CR 523 (CM), 2009 WL 484436, at *1-3 (S.D.N.Y. Feb. 24, 2009); Yian, 1995 WL
614563, at *1-2; United States v. Leonard, 817 F. Supp. 286, 294-95 (E.D.N.Y. 1992).
 In several other cases, the defendants requested all prison records for cooperating
witnesses without any real justification. See Barnes, 560 F. App’x at 40 & n.1 (defendant
“proffer[ed] only speculation” that cooperators “were conspiring to testify falsely,” which
would not even satisfy Tucker standard); United States v. Barnes, No. S9 04-cr-186 SCR,
2008 WL 9359654, at *1, *3 n.2, *4 (S.D.N.Y. Apr. 2, 2008) (defendant did not know
whether requested documents “even exist[ed]” and “merely hope[d] that something
useful w[ould] turn up”) (quotation marks omitted); United States v. Pena, No. 15-CR-
551 (AJN), 2016 WL 8735699, at *2-3 (S.D.N.Y. Feb. 12, 2016) (defendant sought “any
and all” prison records even though “the purpose of the subpoena” was merely to show
that the cooperators “had an opportunity to communicate”).
 In Nachamie, 91 F. Supp. 2d. 552, the court approved a subpoena seeking “all
communications” on a particular subject and permitted the defendant to narrow another
overbroad subpoena that lacked any time frame. Id. at 563-64.
 In RW Professional Leasing, 228 F.R.D. 158, the subpoena demanded “each and every
document ever generated, created or received by [a company] in relation to . . . 1,300 or
more lessees,” “contain[ed] no restriction on the time period,” and therefore “could
amount to a massive search for countless documents, at great expense to [the subpoenaed
company].” Id. at 163-64.
 In United States v. Treacy, No. 08-cr-0366 (RLC), 2008 WL 5082884 (S.D.N.Y. Dec. 1,
2008), the defendant could not “reasonably specify the information . . . believed to be
contained in the documents sought but merely hope[d] that something useful w[ould] turn
up.” Id. at *3 (quotation marks omitted).
The Skeloses’ requests are specific enough to satisfy Nixon, and the motions to quash
should be denied.
III. DFS’S ASSERTIONS OF PRIVILEGE ARE MERITLESS
DFS’s separate motion to quash can be swiftly rejected. It rests entirely on legal
privileges that either have no force in a federal prosecution or do not apply to the documents that
the Skeloses seek.
1. DFS first argues that New York Insurance Law § 311(b) protects the DFS’s
eventual examination report and the underlying evidence from disclosure until the statutory
“procedure . . . has run its course.” (DFS Mot. at 7). The examination report apparently has not
28
yet been prepared (id. at 6, 8), so only the underlying evidence is currently at issue. Even if DFS
accurately describes state law, which is questionable,21 its argument is irrelevant because federal
criminal proceedings are governed by federal law. Privileges “created by state statute” “must
yield when outweighed by a federal interest in presenting relevant information to a trier of fact.”
United States v. 31-33 York St., 930 F.2d 139, 141 (2d Cir. 1991); see also Rajaratnam, 753 F.
Supp. 2d at 323-24; United States v. Wilson, 571 F. Supp. 1417, 1421 n.11 (S.D.N.Y. 1983).
Cf. Dkt. 184 at 5 (government sentencing letter arguing that under the Supremacy Clause, state
protections for pensions must yield to federal law). Here, the Skeloses have more than
adequately justified why the information sought is relevant. Even if the privacy interests
recognized by state law were entitled to weight, DFS has provided no reason to believe that a
protective order would be inadequate to protect those interests. (Gage Decl. ¶ 5).
2. DFS next argues that the law enforcement privilege protects the documents it
collected during its investigation.22 Its assertion of the privilege is, however, both procedurally
improper and substantively meritless.
21
By its terms, the Insurance Law protects only the final report from disclosure, not the
underlying evidence. See N.Y. Ins. Law § 311. DFS cites a single unpublished trial-court
decision, Belth v. Muhl, Index No. 119650/1995 (Sup. Ct. N.Y. Cnty. Apr. 30, 1996), for the
proposition that “disclosure of documents collected in the course of an examination” is also
prohibited. (DFS Mot. at 7). We have not been able to locate a copy of this decision.
Regardless, while lower state court decisions are helpful indicators of state law, they are not
binding, see In re Brooklyn Navy Yard Asbestos Litig., 971 F.2d 831, 850-51 (2d Cir. 1992),
particularly when they find no support in the relevant statute.
22
DFS also invokes the “law enforcement exemption” in Public Officers Law § 87(2)(e), which
is part of New York’s Freedom of Information Law (FOIL). As explained above, state statutory
privileges are irrelevant. See also Adams v. Buffalo Pub. Sch., No. 13-cv-435A, 2014 WL
3882182, at *6-7 (W.D.N.Y. Aug. 7, 2014) (rejecting limits imposed by FOIL).
29
First, DFS has not taken the steps necessary to invoke the privilege. As DFS recognizes
(Dkt. 265-2 ¶ 13), an agency may invoke the law enforcement privilege only after “actual
personal consideration” by the “head of the department having control over the requested
information,” and not merely an attorney. United States v. Wey, 252 F. Supp. 3d 237, 250
(S.D.N.Y. 2017) (quotation marks omitted). In other words, the department head “must have
personally reviewed the purported privileged matter.” Id. (quotation marks omitted).23 Here,
however, DFS Superintendent Maria Vullo does not claim to have personally reviewed the
requested material. Rather, she says only that she is “aware that the requested materials
generally fall into [certain] categories.” (Dkt. 265-2 ¶ 11). As she has not personally reviewed
the requested material, DFS cannot avail itself of the privilege. Wey, 252 F. Supp. 3d at 250.
Second, DFS has not satisfied its “burden of showing” that “the documents contain
information that the law enforcement privilege is intended to protect.” In re The City of New
York, 607 F.3d 923, 944, 948 (2d Cir. 2010). Specifically, DFS “must make a substantial
threshold showing[] that there are specific harms likely to accrue from disclosure of specific
materials.” MacNamara v. City of New York, 249 F.R.D. 70, 79, 85 (S.D.N.Y. 2008) (quotation
marks omitted); see also id. at 79 (requiring a “clear showing of harm”).
DFS has not even tried to make this showing. The explanation it provides is entirely
conclusory: releasing the records would supposedly “interfere with the fullness and fairness of a
current DFS investigation by, among other things, revealing the scope and nature of such
investigation, thereby hampering and compromising, among other things, potential investigatory
strategies.” (DFS Mot. at 9-10; see also Dkt. 265-2 ¶ 16). If this were sufficient justification,
23
This particular quotation appears in the court’s analysis of the deliberative process privilege,
but the court observed that the invocation requirements for the law enforcement privilege are
“substantially similar.” Id.; accord id. at 252 (both privileges require “personal[] review[]”).
30
the privilege would always apply to every document collected by law enforcement, which is not
the law. See Wey, 252 F. Supp. 3d at 251 (“The asserting party may not discharge its burden
with mere conclusory or ipse dixit assertions, but rather must present[] those facts that are the
essential elements of the privileged relationship.”) (quotation marks omitted). Nowhere does
DFS explain how producing any of the documents could possibly hamper its investigation.
Indeed, the “scope and nature” of the investigation is apparent from the DFS Order, which is a
matter of public record.24
Third, even if the privilege applied, the Skeloses’ need for the documents would override
the privilege. See Wey, 252 F. Supp. 3d at 251. This is a “criminal case,” which “alone makes
defendant[s’] need far more ‘crucial’” than other cases in which the privilege has been upheld.
United States v. Graham, 555 F. Supp. 2d 1046, 1049 (N.D. Cal. 2008); accord Irving, 600 F.2d
at 1036. And as explained above, the Skeloses’ need for the documents is substantial; these
documents are not available through other sources; and a protective order would protect DFS’s
interests. See MacNamara, 249 F.R.D. at 80, 86, 92. DFS cannot hide behind privilege to avoid
turning over the documents. See Wey, 252 F. Supp. 3d at 251.
3. Finally, DFS asserts, in a single paragraph, the attorney-client privilege, the
deliberative process privilege, and the work product doctrine. It argues that these privileges
cover “reports, notes, internal memoranda, [and] other documents and emails that were prepared
24
In a stray sentence that DFS did not think important enough to include in its brief,
Superintendent Vullo further suggests that producing the documents could “interfere with the
privacy interests of the individuals that have been cooperating with the investigation.” (Dkt.
265-2 ¶ 16). However, she neither provides any factual basis for this assertion nor any reason to
believe that a protective order would be inadequate to accommodate those privacy interests.
31
by DFS employees.” (DFS Mot. at 10). The Skeloses do not seek any internal materials
prepared by DFS. Accordingly, these privileges are irrelevant.25
CONCLUSION
For the foregoing reasons, the motions to quash should be denied.
25
DFS is correct not to assert these privileges more broadly. Documents and communications
exchanged with third parties plainly fall outside the scope of the attorney-client privilege. See
United States v. Mejia, 655 F.3d 126, 132-35 (2d Cir. 2011). As to the deliberative process
privilege, the subpoenas seek “purely factual information” and external communications, not
internal deliberations of DFS officials. Wey, 252 F. Supp. 3d at 249 (quotation marks omitted).
Moreover, the privilege was not properly invoked, see id. at 250, and does not override the
Skeloses’ showing of need, see id. at 250, 252. Finally, the evidence collected by DFS is not
work product, as it is not confidential and was collected for regulatory purposes, not litigation.
See, e.g., S.E.C. v. Thrasher, No. 92-cv-6987 (JFK), 1995 WL 46681, at *3-4 (S.D.N.Y. Feb. 7,
1995), aff'd, 1995 WL 456402 (S.D.N.Y. Aug. 2, 1995); S.E.C. v. Stratton Oakmont, Inc., No. 92
Civ. 1993 (JES), 1992 WL 226924, at *1 (S.D.N.Y. June 22, 1992). The Skeloses’ need for the
evidence would also override any work product claim. Thrasher, 1995 WL 46681, at *3, *8-9.
32
Dated: March 23, 2018

New York, New York
Respectfully submitted,
/s/ Alexandra A.E. Shapiro

Alexandra A.E. Shapiro
Eric S. Olney
Fabien Thayamballi
Shapiro Arato LLP
500 Fifth Avenue, 40th Floor
(212) 257-4880
G. Robert Gage, Jr.

Gage Spencer & Fleming LLP
410 Park Avenue, Suite 900
(212) 768-4900
Attorneys for Dean Skelos
John J. Kenney
Julian S. Brod
Hoguet Newman Regal & Kenney, LLP
10 East 40th Street
(212) 689-8808
Attorneys for Adam Skelos

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Case 1:15-cr-00317-KMW Document 273 Filed 03/23/18 Page 1 of 40

UNITED STATES DISTRICT COURT

UNITED STATES OF AMERICA,

- v. - S1 15 Cr. 317 (KMW)

DEAN SKELOS and ADAM SKELOS,

MEMORANDUM OF LAW IN OPPOSITION TO

Alexandra A.E. Shapiro

Attorneys for Dean Skelos Attorneys for Adam Skelos

TABLE OF AUTHORITIES .......................................................................................................... ii

A. Anthony Bonomo Is A Key Trial Witness ............................................................................. 2

D. The Government Mischaracterizes The Interests At Stake.................................................... 8

I. THE SUBPOENAS SATISFY RULE 17 ............................................................................ 11

II. THE SUBPOENAS SATISFY THE NIXON STANDARD ................................................ 18

A. This Is Self-Evidently Not A “Fishing Expedition” ...................................................... 18

C. The Subpoenas Are Sufficiently Specific ...................................................................... 26

III. DFS’S ASSERTIONS OF PRIVILEGE ARE MERITLESS .............................................. 28

Adams v. Buffalo Pub. Sch.,

Bowman Dairy Co. v. United States,

Frederick v. Civil Serv. Comm’n of Cty. of Schenectady,

In re Brooklyn Navy Yard Asbestos Litig.,

In re Martin Marietta Corp.,

In re Refco, Inc. Sec. Litig.,

In re The City of New York,

MacNamara v. City of New York,

S.E.C. v. Oakford Corp.,

S.E.C. v. Stratton Oakmont, Inc.,

United States v. Alvarez-Lopez,

United States v. Barnes,

United States v. Barnes,

United States v. Bergstein,

United States v. Beverly,

United States v. Blum,

United States v. Boyle,

United States v. Carollo,

United States v. Cavender,

United States v. Cuadrado,

United States v. Cusick,

United States v. Garcia,

United States v. Graham,

United States v. Holihan,

United States v. Hussain,

United States v. Iozia,

United States v. Jasper,

United States v. King,

United States v. LaRouche Campaign,

United States v. Leonard,

United States v. McClure,

United States v. Mejia,

United States v. Nachamie,

United States v. Neal,

United States v. Neal,

United States v. Nektalov,

United States v. Newby,

United States v. Nixon,

United States v. 31-33 York St.,

United States v. Orena,

United States v. Overton,

United States v. Pena,

United States v. Rajaratnam,

United States v. Ramirez,

United States v. RW Prof’l Leasing Servs. Corp.,

United States v. Seijo,

United States v. Shackney,