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In re Grand Jury Subpoenas. Mal Brothers Contracting Co.

decided: July 6, 1971.

IN THE MATTER OF GRAND JURY SUBPOENAS. IN RE MAL BROTHERS CONTRACTING CO., APPELLANT IN NO. 19297, AND MAL BROTHERS CONTRACTING COMPANY, INC. APPEAL OF GEORGE MALANGA, IN NO. 19296


Ganey, Van Dusen and Gibbons, Circuit Judges.

Author: Ganey

Opinion OF THE COURT

GANEY, Circuit Judge.

Certain officials of the City of Newark were indicted as being part of organized crime (Criminal No. 548-69) concerning matters pertaining to the city's official business. During their trial, Irving Kantor testified that he had created a front corporation, Kantor Plumbing Supply Company, to serve as a funnel through which large sums of money were passed from contractors to city officials. He stated that Mal Brothers Contracting Co. ("Mal Bros.") was one of the contractors, and on June 10, 1970, checks of Mal Bros. to Kantor Supply were introduced into evidence. On behalf of the Federal Grand Jury, then in session, subpoenas duces tecum were served on La Fera Contracting Co. ("La Fera") and C. F. Melanka & Sons, Inc. ("Melanka"), two of the contractors named by Kantor.

The appeal before us is the culmination of events brought to a head on June 11, 1970, when La Fera and Melanka claimed they were unable to comply with the subpoenas because the records called for production by them were in the custody of Mal Bros., pursuant to an agreement creating an entity entitled "Mal Bros. Contracting Co. -- York Street Drainage" ("York Street Joint Venture").

On June 16, 1970, Louis J. Malanga sent reply letters to La Fera and Melanka setting forth his refusal to turn over any joint venture documents on the advice of counsel. The following day, a subpoena duces tecum was served upon Mal Brothers Contracting Co., Inc., to produce the records of that entity from the beginning of 1965 to June 1, 1970. Upon being advised that the "Inc." was a typographical error, the United States Attorney issued an identical subpoena against Mal Bros. as a partnership. Mal Bros. moved to quash both subpoenas, contending, in essence, that it conducted business solely as a partnership and that, accordingly, its records were protected from Grand Jury inspection by the 4th and 5th Amendments.

On June 23, 1970, a motion to quash the subpoenas was filed by Mal Bros. and on July 16, 1970, the district court

"ORDERED that Mal Bros. Contractquash the subpoena duces tecum served on Mal Bros. Contracting Co. is denied; it is further

"ORDERED that Mal Bros. Contracting Co. produce before the Federal Grand Jury, on or before July 21, 1970, all documents and records relating to the York Street Joint Venture, also known as Mal Bros. Contracting Company -- York Street Drainage, and it is further

"ORDERED that Mal Bros. Contracting Co. produce before the Federal Grand Jury on or before July 21, 1970, all documents and records relating to its participation in any joint ventures in the State of New Jersey with respect to any federal, state, county, municipal or bi-state agency or any agency or authority of the above categories which documents and records it holds in its capacity as custodian to which it has a right to access by virtue of its participation therein, and it is further

"ORDERED that Mal Bros. Contracting Co. produce, before the Federal Grand Jury, on or before July 21, 1970, all partnership records requested by the above-mentioned subpoena duces tecum, without prejudice to assert any constitutional privilege to such records."

From this order of the district court of July 16, 1970, George Malanga and Mal Bros. Contracting Co. appealed to this court.

On July 17, 1970, the United States Attorney was informed that portions of the York Street Joint Venture records presently could not be located and Mal Bros. had requested its bank to photostat all checks pertaining to the joint venture, as well as its bank statements, for the purpose of submitting them to the Government. However, on July 20, 1970, Mal Bros. turned over to the United States Attorney all records of York Street Joint Venture which it claimed could be located and stated that it had been advised by its accountant that it could destroy the bookkeeping and accounting records after a three-year period.

On July 21, 1970, Mal Bros., represented by George Malanga, appeared before the Grand Jury and refused to produce any documents requested under the order of July 16, 1970, with the exception of two small manila packages labeled "Cash Disbursements, 1968 and 1969" and with it asserted his claim of privilege against ...


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