STATE OF NEW YORK OFFICE OF THE ATTORNEY GENERAL BARBARA D. UNDERWOOD DIVISION OF CRIMINAL JUSTICE ATTORNEY GENERAL PUBLIC INTEGRITY BUREAU November 13, 2018 BY REGULAR MAIL E-MAIL Hon. Barry E. Warhit Westchester County Court . 111 Dr. Martin Luther King, Jr. Blvd. White Plains, NY 10601 mbenj am@nycourts.gov I: Re: People v. Richard Thomas,1nd.No. 18?0522 Dear Judge Warhit: We write in response to Messrs. Pizzi?s and Kuene?s letter to this Court dated November 9, 2018, concerning the potential conflict issue involving their representation of the defendant (the ?November 9 Factual Inaccuracies In the November 9 Letter, counsel write that ?Mr. Kuehne and Mr. Pizzi do not represent and have never represented Joseph Spiezio 111.? (November 9 Letter at 3.) Counsel further write, ?Mr. Kuehne and Mr. Pizzi are not representing Mr. Spiezio in any individual capacity. . . (November 9 Letter at 5.) Neither of those assertions appear to be accurate. According to the Miami-Dade County Civil, Family and Probate Courts Online System (?Miami-Bade Courts Online System?), Mr. Pizzi and Mr. Kuehne both currently represent Joseph Spiezio (?Spiezio?) in his individual capacity in the following matter: 1 While the People seek to focus on the most important issues in this response, we feel compelled to note that our positions on the following matters has not changed: Contrary to defendant?s claim in the November 9 Letter (November 9 Letter at I), we have never opposed counsel?s pro hac vice motion, but only suggested that a decision on that motion await a decision on the con?ict inquiry. Nor have we ever moved to disqualify any of defendant?s counsel. Hon. Barry E. Warhit November 13, 2018 Page 2 of 6 Joseph Spiezio, et al. vs. City of Opa-Locka, Florida, Local Case Number: 2018-027830CA-01; State Case Number: 132018CA027830000001. Joseph Spiezio is listed as a plaintiff and Michael A. Pizzi, Jr. is listed as his attorney. Mr. Pizzi is also listed as a plaintiff. The filing date is 8/17/2018 and the case status is “Open.” The complaint (without exhibits) is attached as Exhibit 1. Furthermore, in an “Emergency Motion for Expedited Hearing” E-Filed on 08/17/2018, available on the Miami-Dade Courts Online System, both Messrs. Pizzi and Kuehne sign the pleading which indicates that they represent Spiezio individually. That motion is attached as Exhibit 2. According to the Miami-Dade Courts Online System, both Messrs. Pizzi and Kuehne represent Spiezio’s company in the following matter: Universal Waste Services of Florida vs. Great Waste & Recycling Services, LLC, Local Case Number 2017-001876-CA-01; State Case Number: 132017CA001876000001. Universal Waste Services of Florida, Inc. is listed as plaintiff and Benedict P. Kuehne is listed as the attorney. Furthermore, Joseph Spiezio, III is listed as “Third Party Defendant” with no attorney listed. The filing date is 01/24/2017 and the case status is “Open.” A screenshot showing the parties in this case is attached as Exhibit 3. That Spiezio is named in this lawsuit in his individual capacity as a “Third Party Defendant” with no identified counsel, raises the question, that this Court should determine at a hearing, as to whether Mr. Kuehne or Mr. Pizzi are representing Spiezio individually in that case. 2 According to the Miami-Dade Courts Online System, Mr. Pizzi, despite what is claimed in the November 9 Letter, has represented Spiezio in his individual capacity in the following matter: Joseph F. Spiezio, III vs. Hector Castellanos, Local Case Number: 2017-0029808-CA-01; State Case Number: 132017CA002908000001. Joseph F. Spiezio, III is listed as the plaintiff and Michael A. Pizzi, Jr. is listed as his attorney. The filing date is 02/06/2017 and the case status is “Closed.” The complaint is attached as Exhibit 5. As part of their argument that there is no potential conflict, counsel state that “[t]o the extent Messrs. Kuehne and Pizzi represent a corporation for which Mr. Spiezio is a principal, the corporation is a separate legal entity organized under Florida law that has a separate legal personhood apart from its owners, officers, and employees.” As a technical, legal question, the People do not dispute the legal principle that a corporation and its principal are legally separate entities. Equally true, however, is that corporations act through people. Thus, simply because the defendant’s corporation is a separate legal entity from Spiezio, does not mean that there is still not 2 According to filings on the Miami-Dade Courts Online System associated with the case, on January 24, 2017, Mr. Pizzi signed a complaint along with a verification signed by Spiezio where he was identified as “Chairman and Authorized Representative” of Universal Waste Services of Florida, Inc. Mr. Kuehne’s representation began on July 11, 2018, when he filed a notice of appearance as co-counsel, along with Mr. Pizzi and another attorney, for Universal Waste Services of Florida, Inc. The complaint and notice of appearance are attached as Exhibit 4. 28 LIBERTY STREET, NEW YORK, NY 10005 ● PHONE (212) 416-8090 ● FAX (212) 416-8026 ● WWW.AG.NY.GOV Hon. Barry E. Warhit November 13, 2018 Page 3 of 6 a potential conflict. In deciding if a conflict exists, this Court should determine the extent to which Spiezio controls the corporation and directs the corporation’s lawyers on how to represent the corporation. Based on a review of bank records and the 2018 annual report filed by Mr. Pizzi with the Florida Secretary of State, it is the People’s understanding that this is a small, closely held corporation that, like most small companies, does not have an in-house general counsel to deal with outside lawyers. Therefore, it is probable that Spiezio communicates with and directs the lawyers in their representation of his company. If that is true, then it would be of no moment for conflict purposes that the lawyers represent the corporation and not Spiezio in an individual capacity. Finally, in the November 9 Letter, counsel writes that the People’s request for a Gomberg hearing is “better viewed as a delaying tactic.” (November 9 Letter at 2.) That is simply not true. The People are ready to try this case and, in fact, expected to go to trial in January 2019. It is defendant and not the People who are currently seeking to adjourn the trial date. 3 Use of City of Mount Vernon Funds to Pay for Criminal Defense In our November 5, 2018 letter to this Court, the People alluded to the potential conflict that the acceptance of unlawfully obtained City of Mount Vernon, New York (the “City”) funds to pay for the defendant’s criminal defense might pose in this case. While the People generally do not disclose the existence of a criminal investigation, let alone discuss it in some detail, we find it necessary to do that here in order to alert the Court of the potential conflict and to alert defense counsel of the potential ethical and legal peril they may face in accepting what may be charged as stolen funds. 4 3 The defendant claims that he had reported “documented instances of widespread public corruption” to the Attorney General’s Office and counsel attached two exhibits to the November 9 Letter that purportedly showed that. While not only is the defendant’s assertion entirely irrelevant to the issue of a potential conflict, it is specious. The defendant’s March 14, 2018, letter (Def. Exhibit A) was sent to the Office of the Attorney General just two days after the defendant was arrested on a felony complaint. That March 14 letter was clearly meant to serve as a distraction from the felony complaint that was just filed against him. As to his December 8, 2016, letter (Exhibit B) a review of that letter shows that it was addressed to the City of Mount Vernon’s Comptroller, and copied to eight other individuals or entities, none of which included the Attorney General’s Office. 4 We have redacted grand jury material from the publicly filed version of this document, but have provided an unredacted version to the Court and counsel. 28 LIBERTY STREET, NEW YORK, NY 10005 ● PHONE (212) 416-8090 ● FAX (212) 416-8026 ● WWW.AG.NY.GOV Hon. Barry E. Warhit November 13, 2018 Page 4 of 6 Publicly available documents show that on May 1, 2018, the City’s Board of Estimate and Contract, which is comprised of the defendant, the City Comptroller and the City Council President, held a meeting during which a resolution was on the agenda to retain Boies “for various litigation matter for which the [City of Mount Vernon] is a party.” The May 1 agenda and Boies resolution are attached as Exhibit 6. The proposed resolution stated that the City’s Corporation Counsel, “recommended that this Board retain[] Boies for various litigation matters for which the City is a party.” It also cited the City’s charter, Section 153, and specified that “the Corporation Counsel, with the written consent of the Mayor, may employ counsel at such compensation as may be agreed upon by the Board of Estimate and Contract in the conduct of proceedings in which the City is a party.” See Exhibit 6. The proposed resolution set forth in detail the rates that Boies would charge. During the May 1, 2018 meeting of the Board of Estimate and Contract, the proposed resolution to retain Boies was raised. A publicly available video tape of the proceedings, along with publicly available City records, show that when the City Clerk read the proposed resolution aloud, no motion was made to adopt it. Neither the City Comptroller nor the City Council President spoke. The proposed resolution was marked as “held,” and thus payment by the City to Boies was not approved. The next day, on May 2, 2018, the proposed resolution to retain Boies appeared as part of a single resolution at a “Special” meeting of the Board of Estimate and Contract. The May 2 agenda and resolution attached as Exhibit 7. The retainer for Boies was grouped together with other law firms as well as a public relations firm. Again, the purpose of retaining Boies was noted for “various litigation matters for which the City is an interested party.” Id. According to a publicly available City record, there was “no motion” made on the resolution. See Exhibit 7. We later learned that the City Comptroller was absent, and another member of the City Council appeared as City Council President Pro Tem. With no motion on the proposed resolution, no vote was taken, and the use of City funds to pay Boies was not approved. 28 LIBERTY STREET, NEW YORK, NY 10005 ● PHONE (212) 416-8090 ● FAX (212) 416-8026 ● WWW.AG.NY.GOV Hon. Barry E. Warhit November 13, 2018 Page 5 of 6 Based on a review of publicly available Board of Estimate and Contract records, it is the People’s understanding that, to this day, the Board of Estimate and Contract has never approved any payments by the City to any lawyer representing the defendant in this criminal case. Without such approval, and when the recipient knows that they are unauthorized, any such payments that are made or received, are potentially chargeable as a theft from the City. Conclusion In the November 9 Letter, counsel claim that “[i]t is improper for the Court to inquire into the fee arrangements between Mr. Kuehne and Mr. Pizzi and any of their clients, including Mayor Thomas.” (November 9 Letter at 6.) That is simply wrong. The law is clear that an inquiry into fee arrangements is perfectly permissible and is highly relevant in determining a potential conflict. See Rule 1.8(f) of the New York Rules of Professional Conduct; See also, Priest v. Hennessy, N.Y.2d 62,70 (1980)(name of “person retaining an attorney for another and the amount of the retainer paid” is not protected by attorney client privilege); Matter of Grand Jury Subpoena of Stewart, 144 Misc. 2d 1012, 1018 (Sup. Ct. NY Cty.) Crocker-Snyder, J., aff'd as modified sub nom. In re Stewart, 156 A.D.2d 294 (1st Dep’t 1989) (“the potential for disclosure of fee arrangements is present in every attorney-client relationship”); United States v. Schwarz, 283 F.3d 76, 96 (2d Cir. 2002)(amount of money paid to potentially conflicted counsel is relevant in determining conflict). Counsel also suggest that any Gomberg “inquiry should be conducted in Camera and ex parte.” (November 9 Letter at 6.) However, the cases cited by counsel don’t support an ex parte inquiry. In neither People v. Alexander, 255 A.D.2d 708 (3rd Dep’t 1998) nor People v. De Sarno, 239 A.D.2d 74 (3d Dep’t 1998), did the court approve an ex parte Gomberg inquiry. Those cases support only the proposition that the court may hold an in camera inquiry, which is something that the People take no position on in this case. As briefly stated in the People’s earlier letter dated November 5, 2018, it may be that the principles of People v. Gomberg, 38 N.Y.2d 307 (1975), are best implemented if this Court appoints an independent conflicts counsel to assist the defendant during the Gomberg hearing. Independent counsel will be better able to assist the defendant in understanding the consequences of any identified conflict with his present counsel, and to ensure that defendant's waiver of the conflict in seeking continued representation by defense counsel, is made knowingly and voluntarily. See e.g. United States of America v. Basciano, et al., 384 Fed. Appx 28 *34 (2d Cir. 2010), cert denied, 562 U.S. 1190 (2011) (trial court “appointed independent counsel to advise defendant on the nature and consequences of the conflict”); People v. Carncross, 14 N.Y.3d 319, 327 (2010) (in upholding the trial court’s disqualification of conflicted counsel, even though the defendant was willing to waive the conflict, the court took note that the trial court had appointed an independent counsel “to advise the defendant with respect to the conflict of interest and its implications.”); People v. Tancredi, 19 Misc. 3d 1109(A), 2008 WL 795771, *2-3 (Sup. Ct. 28 LIBERTY STREET, NEW YORK, NY 10005 ● PHONE (212) 416-8090 ● FAX (212) 416-8026 ● WWW.AG.NY.GOV Hon. Barry E. Warhit November 13, 2018 Page 6 of 6 Westchester Co. 2008)(court appointed independent counsel to advise prosecution witness when defense counsel represented witness as victim in civil rights suit and defendant in related criminal case). To reiterate, the People request that this Court hold a hearing to ascertain the nature and extent of the alleged conflict of interest between defense counsel and the defendant, and that the hearing include an inquiry of the defendant under Gomberg. Sincerely, Daniel G. Cort Brian P. Weinberg Assistant Attorneys General cc: Benedict Kuehne, Esq. [ben.kuehne@kuehnelaw.com] Michael Pizzi, Esq. [mpizzi@pizzilaw.com] Anthony Ricco, Esq. [tonyricco@aol.com] 28 LIBERTY STREET, NEW YORK, NY 10005 ● PHONE (212) 416-8090 ● FAX (212) 416-8026 ● WWW.AG.NY.GOV