United States v. Schwimmer

892 F.2d 237 (2d Cir. 1989)

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Nature of the Case

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Facts

Renda formed First United Fund, Ltd. to engage in placing Certificate of Deposit ('CD') investments in small banking institutions throughout the United States. Renda met D at a computer store, fell into a conversation with him, and learned that he too was in the business of placing funds for institutional investors. Renda and D joined forces shortly thereafter. D had been the investment adviser to four employee benefit plans. The guidelines for investing furnished by the trustees of the plans required low-risk investments, primarily federally insured CDs. At first, D made only short-term investments through First United under an agreement with Renda calling for an equal division of the commissions. D and Renda developed a system of off-the-book accounts for their long-term investment commissions. Between December 1981 and December 1984, D and Renda placed $72,910,000 for the Local 810 benefit plans and $22,985,487 for the Local 38 benefit plans in long-term CDs issued by approximately twenty banks and savings and loan associations. Commissions totaled $16,520,375, which D and Renda shared. It was not until 1986 that D reported for the first time that some of the CD investments he had made were not insured. P began an investigation into their employee benefit plan investment activities. D and Renda each retained counsel. D, Renda and their attorneys agreed to cooperate in all matters of mutual concern related to the investigation and to the defense of any charges that might be made against them. Ralph Glickman, a certified public accountant, was hired by attorney Silverman in June of 1984 to serve the joint interests. D was told that any conversations with the accountant would be protected by the attorney-client privilege. When Renda’s trial ended, P ordered Glickman to turn over the documents he produced for Renda’s defense. P did not use any of the documents at D’s trial. D claimed that P sued the documents to build the case again him. D was convicted and appealed; P had violated attorney client privilege in using Glickman’s documents.