United States v. Rakes

136 F.3d 1 (1st Cir. 1998)

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Nature of the Case

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Facts

D and Julie Rakes were married in 1978. In 1983, with the help of their attorney, John Sullivan, the couple established a corporation named Stippo's, Inc., as their jointly owned company to operate a liquor store. The couple was threatened by unnamed people in South Boston who were angry that they were underpricing competitors. James 'Whitey' Bulger visited D at home while Julie was at the liquor store and threatened to kill D unless Bulger or his associates were made partners in the liquor store. By May 1984, again with the assistance of Sullivan, the Rakeses had transferred Stippo's, Inc., to another individual, whom the government believes was associated with Bulger, for a fraction of what the government says was its real value. D was summoned before a federal grand jury in Massachusetts investigating extortion, racketeering, and money laundering. D testified that he had sold the store to make a profit and because it was too much work, and said that no one had threatened him to make him sell the store. In September 1995, D gave similar testimony before a second federal grand jury. Thereafter, the government called Julie Rakes and Sullivan before the same grand jury. Although Sullivan initially refused to discuss his conversations with D and Julie Rakes, the government secured an order from a district judge compelling Sullivan's testimony. D was not advised that the proceedings to compel Sullivan's testimony were underway. In May 1996, the grand jury indicted D, charging him with perjury and obstruction of justice. Asserting the privilege for confidential marital communications, D moved to suppress evidence of conversations in December 1983 and January 1984 between him and Julie Rakes concerning alleged threats and the sale of Stippo's. He also asked the court to suppress, on grounds of attorney-client privilege, conversations between D or both Rakeses and Sullivan concerning the sale of Stippo's, Inc. and the purpose of the sale. The district court granted D's motion with one exception: it denied the motion as to one conversation between Stephen and Julie Rakes, apparently because it took place in the presence of a third party. P appealed.