OPINION

[Dkt. No. 65]

RENÉE MARIE BUMB, District Judge.

This matter comes before the Court upon the filing of a motion for dismissal of the indictment by Defendant Frederick M. DiAntonio ("Mr. DiAntonio") as a result of alleged prosecutorial misconduct that occurred during Mr. DiAntonio's grand jury appearance as the custodian of records for Blue Ocean Realty. [Dkt. No. 65.] Defendant Louis Catarro ("Mr. Catarro," and with Mr. DiAntonio, "Defendants") joined this motion on April 17, 2015. [Dkt. No. 83.] On December 2, 2015, this Court denied Defendants' motion, reserving the reasoning for that Order for a subsequently issued opinion. [Dkt. No. 109.] This Opinion sets forth the reasoning for the Court's denial of that motion.

I. FACTUAL BACKGROUND

As an initial matter, the motion to dismiss the indictment arises from the grand jury testimony that Mr. DiAntonio delivered as the custodian of records for Blue Ocean Realty. By way of brief background, Mr. DiAntonio and Mr. Catarro have been indicted in this case for three offenses: (1) conspiracy to commit wire fraud, (2) conspiracy to commit money laundering, and (3) false statements to HUD. [Dkt. No. 1 (Hereinafter, "Indictment at ¶__.").) As set forth in the indictment, the Defendants were purportedly involved in a scheme centering on $15 million in real estate transactions supposedly underpinned by fraudulent mortgage loan applications. (Id. at ¶ 15.)

Specifically, the Government alleges that Mr. DiAntonio, a licensed realtor in New Jersey, is the co-owner of Blue Ocean Realty, located in Wildwood, New Jersey. (Id. at ¶ 1.) Working with other co-conspirators, Mr. DiAntonio and Mr. Catarro located properties for sale in Wildwood and North Wildwood, New Jersey. (Id. at ¶ 15.) Thereafter, co-conspirator John Lucidi1 allegedly induced individuals to purchase properties in these areas by telling them "they would receive cash back at closing and could flip the property at a later date for a profit." (Id.) Mr. DiAntonio and others would then generate real estate sales contracts which listed inflated sales prices and indicated deposit money from buyers had been received which were not actually collected. (Id. at ¶ 17.)

Many of these real estate sales contracts contained addenda which listed money amounts the buyers would receive at closing. (Id. at ¶ 18.) These amounts, however, were not disclosed on the Housing and Urban Development Settlement Statements ("HUD-1 Settlement Statements."). (Id.) Mortgage loan applications were then prepared, without disclosing that a buyer was receiving what allegedly amounted to "kickbacks" or that the buyer had not actually paid a deposit toward the purchase of the property. (Id. at ¶ 19.) The object of the conspiracy, as told by the Government, was to profit from the sale of the real estate which was "overbuilt by financially distressed developers in Wildwood and North Wildwood, New Jersey, and other properties. . . by obtaining mortgage loans for unqualified borrowers using fraudulent loan applications, HUD-1 Settlement Statements, and other documents." (Id. at ¶ 13.)

A. The Grand Jury Proceedings

As part of the proceedings before the grand jury tasked with investigating possible violations of criminal law including mortgage fraud, Mr. DiAntonio appeared as a witness. He appeared not in his individual capacity, but rather in his capacity as the custodian of records for Blue Ocean Realty. (Grand Jury Tr. at 4:8-12.) The Prosecutor's first set of questions directed at Mr. DiAntonio confirmed this:

(Id.)

While Defendants contend that the Government knew either Mr. DiAntonio or Mr. Catarro would appear as custodian of records, the revelation of Mr. DiAntonio's specific appearance came, at the very least, on short notice.2 On April 27, 2010, one day prior to taking the stand to testify as the custodian of records, Mr. DiAntonio's then-counsel informed the Government by letter to Agent Stefanowicz, that,

(Defs.' Br. Ex. A.) According to the Government, this letter was not shared with the prosecutor until the morning of the grand jury session. (Gov.'s Opp. Br. at 8.) This is confirmed by the initial questioning during the grand jury proceedings:

(Grand Jury Tr. at ¶ 3.)

Directly after confirming that Mr. DiAntonio was appearing in his capacity as custodian of records for Blue Ocean Realty, the following questions by the Prosecutor and answers by Mr. DiAntonio were exchanged:

(Grand Jury Tr. at 4:13-5:5.)

The prosecutor thereafter proceeded to ask Mr. DiAntonio a series of questions concerning documents that had been produced by Blue Ocean Realty in response to Government subpoenas. Throughout the testimony, an attorney from the firm representing Blue Ocean Realty and Mr. DiAntonio, Mr. Polis, was available outside the Grand Jury's presence to speak with Mr. DiAntonio. (Id. at 5:17-5:20.) The prosecutor instructed Mr. DiAntonio that he was able to speak with his attorney at any point. (Id. at 7:2-8.)

Throughout the course of the testimony, Mr. DiAntonio frequently invoked his Fifth Amendment right against self-incrimination. Indeed, he invoked it at least five times throughout the proceedings. For instance, the first such time Mr. DiAntonio asserted his Fifth Amendment privilege—roughly a quarter of the way through his testimony—the exchange proceeded as follows:

(Id. at 9:1-20.)

A second time Mr. DiAntonio asserted his privilege came in an exchange related to the Government's questioning concerning the files produced, and an addendum attached:

(Id. 22:20-24:7.)

The examination continued to discuss the documents provided by Blue Ocean Realty in response to subpoenas. After asking Mr. DiAntonio if the documents produced were "complete, meaning everything relating to the transactions for those — for that real estate purchase will be in there," Mr. DiAntonio again asserted his Fifth amendment right. (Id. at 32:4-7.) This exchange followed:

As the examination of Mr. DiAntonio continued, he continued to assert his Fifth Amendment privilege against self-incrimination at various intervals. Another invocation of his Fifth Amendment privilege occurred during an exchange about addendums to sales contracts which disclosed payments back to sellers:

(Id. at 36:15-37:9.)

Mr. DiAntonio's final invocation of his Fifth Amendment privilege occurred as the Government sought testimony concerning a second set of records that were not produced by Blue Ocean Realty. Instead, a comparison between what was produced by Blue Ocean Realty and documents available to the Government through other means was sought:

(Grand Jury Tr. at 38:4-41:4.)

Shortly after this exchange, the Government concluded Mr. DiAntonio's examination before the Grand Jury. On January 30, 2013, the Government filed an indictment of Mr. DiAntonio and Mr. Catarro—among others—in this Court. [Dkt. No. 1.]

As noted above, after an extended nearly two-year pre-trial period, Mr. DiAntonio and Mr. Catarro moved on December 5, 2014 to dismiss the indictment, arguing that Mr. DiAntonio was the victim of prosecutorial misconduct before the grand jury. Specifically, Mr. DiAntonio argues that the prosecutor compelled Mr. DiAntonio to answer questions in contravention of his personal Fifth Amendment privilege. After oral argument on the motion and supplemental briefing, this Court ruled on December 2, 2015 that the motion to dismiss the indictment was denied. [Dkt. No. 109.] Below, the Court sets forth its reasoning for that determination.

II. STANDARD

District Courts "have the power to dismiss an indictment based on prosecutorial misconduct." United States v. Breslin, 916 F.Supp. 438, 441 (E.D. Pa. 1996). Nevertheless, this is an extreme remedy and, correspondingly, a very demanding standard. United States v. Martino, 825 F.2d 754, 759 (3d Cir. 1987) ("In fact, in none of the Third Circuit cases in which we found prosecutorial misconduct before the grand jury did we order dismissal of the indictments."). And, because dismissal is the most drastic remedy, United States v. Bansal, 663 F.3d 634, 660 (3d Cir. 2011) (quoting United States v. Morrison, 449 U.S. 361, 365 n.2 (1981)), a dismissal may be ordered only if it can be shown that the failure to do so would actually "prejudice" the defendant. Id. "Prejudice" exists and the indictment should be dismissed "if it is established that the violation substantially influenced the grand jury's decision to indict,' or if there is `grave doubt' that the decision to indict was free from the substantial influence of such violations." Bank of Nova Scotia v. United States, 487 U.S. 250, 254-55 (1988).

As an additional clarification, it is well-settled that the Fifth Amendment privilege against self-incrimination does not extend to corporations. In re Grand Jury Empaneled on May 9, 2014,, 786 F.3d 255, 258-261 (3d Cir. 2015). To this end, the Supreme Court has acknowledged that a custodian of records may be subpoenaed to testify about records previously produced. Nevertheless, the custodian of records is privileged from being compelled "to do more than identify [the] documents already produced." Curcio v. United States, 354 U.S. 118, 125 (1957) ("A custodian, by assuming the duties of his office, undertakes the obligation to produce the books of which he is a cutosdian in response to a rightful exercise of the State's visitorial powers."). As such, a custodian cannot assert a Fifth Amendment privilege in his capacity as the custodian of records. However, to the extent that oral testimony is sought by the prosecution which goes beyond the scope of the custodian of records' identification, the Fifth Amendment privilege remains operative to be invoked by the individual. Id. ("[A custodian] cannot be compelled, in the absence of a grant of adequate immunity from prosecution, to condemn himself by his own oral testimony.").

III. ANALYSIS

A. Defendants' Argument

Defendants argue that Mr. DiAntonio was compelled to answer questions beyond the scope of document authentication. (Defs.' Br. at 14-21.) Specifically, Mr. DiAntonio argues that the actual compulsion took place in two ways. First, Defendants argue that Mr. DiAntonio was compelled by the Government's instruction to answer "all" questions at the outset of his grand jury testimony. In so doing, the prosecutor "impl[ied] that Mr. DiAntonio had to answer every question and could not assert the right to his Fifth Amendment privilege in response to any question." (Defs.' Supp. Br. at 5.)

Second, Defendants argue that the Government repeatedly "rejected" Mr. DiAntonio's assertions of the Fifth Amendment Privilege. (Defs.' Supp. Rep. Br. at 9.) Specifically, the Defendants argue that Mr. DiAntonio would time and time again assert his Fifth Amendment privilege only to be thwarted in so doing by a continuous stream of reformulations of the same question designed to ultimate deceive Mr. DiAntonio into revealing incriminating information. (Defs.' Supp. Br. at 6-12.) In so doing, the Government "indicat[ed] to Mr. DiAntonio that he could not afford himself of the protections of the Fifth Amendment in response to any question, and he had to answer all of the questions posed by [the prosecutor], even if a `responsive answer to the question or an explanation of why it cannot be answered might be dangerous because injurious disclosure could result." (Defs.' Supp. Rep. Br. at 16. (quoting Hoffman v. U.S., 341 U.S. 479, 479 (1951).)

Ultimately, as a result of this purported disregard of Mr. DiAntonio's Fifth Amendment privilege, Mr. DiAntonio provided several pieces of personally incriminating information. Specifically, Defendants argue that Mr. DiAntonio provided information about his definition of a seller assist and his potential withholding of documents from the government. (Defs.' Br. at 16-17.) According to Defendants, the cumulative effect of the Government's conduct yields prejudice sufficient to dismiss the indictment.

B. Government's Argument

In response the Government argues that Mr. DiAntonio was not compelled to give testimony. Specifically, the Government offers that, "While a records custodian cannot be compelled by a Court to answer certain questions posed during a grand jury proceeding, the mere posing of questions does not amount to prosecutorial misconduct." (Gov. Supp. Br. at 4.) According to the Government, Mr. DiAntonio was free to—and did—exercise his Fifth Amendment privilege.

The Government also attacks the notion that the questions asked of Mr. DiAntonio were improperly calculated to reveal incriminating information and not information typically sought from a custodian of records. The Government focuses on the line of questioning concerning missing documents in a Blue Ocean Realty production. In arguing that these questions about missing documents could be legitimately posed to a custodian of records, the Government puts forward a list of possible, permissible answers this question could have received, such as: "Those missing documents were in a different location that I did not search. They are in our Los Angeles facility and I can get them for you." (Id. at 6.) Such answers, the Government argues, would of course be within the ambit of a custodian of records. "Thus, the question is not improper, and only the witness knows whether the invocation of the Fifth Amendment privilege would be proper." (Id. at 6.); see also In re Grand Jury, 869 F.Supp. 298, 308 (D.N.J. 1994) (Bassler, J.) ("[T]he touchstone for evaluating the appropriateness of the privilege where the custodian claims that oral testimony beyond the mere identification will violate the Fifth Amendment must be the incriminating tendency of the disclosure."). As such, no prosecutorial misconduct existed where the questions were proper and the witness was not compelled to answer questions.

C. Mr. DiAntonio Was Not Compelled to Answer

For a multitude of reasons, this Court cannot agree with Defendants' contention that Mr. DiAntonio was compelled by the Government to answer questions which might individually incriminate him. In so holding, the Court is mindful of the fact that ex parte examination of a witness, particularly one who is or may soon be a target of an investigation, is a potentially perilous situation from the standpoint of the Fifth Amendment. See generally United States v. Remington, 208 F.2d 567, 573 (2d Cir. 1953) ("Save for torture, it would be hard to find a more effective tool of tyranny than the power of unlimited and unchecked ex parte examination.") (Hand, J., dissenting).

Nevertheless, the upshot of the Supreme Court's jurisprudence in the context of document custodian examination reveals the malady is not in the examination of custodians (even those under individual investigation), but rather in the compulsion of an answer to questions in contravention of the invocation of the Fifth Amendment. Curcio v. United States, 354 U.S. 118, 2126 (1957) (holding the government may not "compel [a custodian] to disclose, by his oral testimony, the whereabouts of books and records which he has failed to produce" (emphasis added)). As the Government rightly points out, "[T]he mere fact that a witness cannot be compelled to answer a question that would incriminate him does not mean that merely asking the question is [necessarily] improper." (Gov. Supp. Br. at 5.) With this distinction clarified, it is evident from a searching review of the transcript and accompanying circumstances that Mr. DiAntonio was not compelled to answer any questions in violation of his Fifth Amendment privilege.

Initially, the Court is not persuaded that the mere instruction that Mr. DiAntonio must answer all questions "truthfully" amounts to an implicit compulsion that he must answer "all" questions. (Grand Jury Tr. at 4:17-5:4 ("So you must, therefore, give truthful answers today in response to all questions put to you, either by me or any member of the Grand Jury . . . If you should lie or knowingly make false statements in your testimony, you or Blue Ocean Realty could be prosecuted for the crimes of perjury.") Such a reading of a routine witness instruction is tortured at best. By any rational construction, the direction from the prosecutor is that Mr. DiAntonio may not answer untruthfully to any questions.3 The Court struggles to grasp how anyone hearing the instruction, in essence, "you must answer all questions truthfully," could misinterpret that instruction as a requirement that all questions be answered completely and without regard for any privilege. Moreover, even if the instruction could be so interpreted, Mr. DiAntonio certainly did not understand the instruction that way, as he repeatedly invoked the privilege throughout his testimony. (See Grand Jury Tr. at 9, 23, 32, 36, 39.)

Likewise, the Government's re-calibration of questions in the wake of Mr. DiAntonio's continuous invocation of his Fifth Amendment privilege does not represent a compulsion to testify under these facts. In each instance of the assertion of the privilege, it is clear the Government did not relent in its examination of Mr. DiAntonio as custodian. But, the exchanges after the Mr. DiAntonio asserted the privilege do not amount to impermissible badgering of the witness to repeatedly invoke the Fifth Amendment or a coercive force. Rather the subsequent questions invariably re-focus the inquiry away from Mr. DiAntonio's personal actions and mental state and onto the actions he took as custodian and the associated knowledge. (See, e.g., Grand Jury Tr. at 23:4-8.) It would be strange to suggest that once the individual Fifth Amendment privilege is invoked by a custodian, any and all questions in the same universe—even an ordinarily permissible one such as, "Where are the missing documents?"—must be abandoned.4

For instance, when asked if the documents in a loan file produced by Blue Ocean Realty were "complete," Mr. DiAntonio asserted his Fifth Amendment privilege. (Grand Jury Tr. at 31:25-32:11.) This customary custodian question came at the heel-end of other questions meant to authenticate the documents. (Id.) The Government responded, "Well, sir, when you say you plead the Fifth, I mean you're appearing here as the custodian of records —" and before another question was posed, Mr. DiAntonio inserted, "Oh, oh, I understand what you're saying. Yes, yes, it's what's in my file, yes." (Id.) The fact that the prosecutor sought to understand whether Mr. DiAntonio was able to speak to any portion of the file's completeness without individually incriminating himself does not amount to a "trampling" of his Fifth Amendment privilege. (Defs.' Supp. Rep. Br. at 13.) The same is true across all other invocations of the Fifth Amendment by Mr. DiAntonio. Contrary to Defendants' argument, at no point did the prosecutor refuse to accept Mr. DiAntonio's personal invocation of his privilege. (See e.g., Grand Jury Tr. at 36:22-37:2.)

Finally, and most tellingly, Mr. DiAntonio's conduct throughout the Grand Jury testimony evidences the fact he did not believe himself required to answer questions beyond the scope of authenticity. As Mr. DiAntonio concedes, he invoked the Fifth Amendment privilege against self-incrimination repeatedly. (See Grand Jury Tr. at 9, 23, 32, 36, 39.) While he did not always re-assert that privilege when the question was changed or more closely tethered to his capacity as custodian of records, that does not mean that he was somehow duped into answering impermissible questions in a coercive manner.

The Court is also unpersuaded by Defendants' argument that U.S. v. McLaughlin, 126 F.3d 130 (3d Cir. 1997), stands for the proposition that Mr. DiAntonio's Fifth Amendment privilege in this case was self-executing and not waived by his decision to answer questions. (Defs.' Supp. Br. at 12.) McLaughlin stands for the relative straightforward proposition that Braswell v. U.S., 487 U.S. 99 (1988), which dictates that the Fifth Amendment privilege prevents prosecutors from making any evidentiary use of an individual defendant's production of documents in his or her custodial capacity,5 also applies to an individual's non-production of documents and does not need to be separately invoked at production. Put differently, the holding of McLaughlin is simply that where a defendant fails to produce certain documents in his or her custodial capacity in response to a subpoena, the prosecution may not make evidentiary use of that failure. Id. at 134 ("[T]he testimonial aspect of production is not limited to the act of handing material over to the Government—it also may include the custodian's exercise of discretion over which material to produce and which to omit."). In this case, the Government has repeatedly stated that it will make no evidentiary use of Mr. DiAntonio's production or non-production of documents. As such, McLaughlin is inapposite to the issue before the Court.

IV. CONCLUSION

In sum, the Government is correct that neither it nor any Court, could have compelled Mr. DiAntonio to answer any question in contravention of his Fifth Amendment privilege. (Gov. Supp. Br. at 7.) Nevertheless, where the Defendant answers questions posed to him—particularly questions that are proper to be asked of a custodian of records—no prosecutorial misconduct has been committed. Accordingly, the Court holds that the Government did not engage in prosecutorial misconduct.6 The dismissal of the indictment in this case would be improper. Defendants' motion seeking such relief is, accordingly, DENIED.