The first jury trial seeking to hold a financial
institution liable for its complicity in Scott Rothstein's $1.4 billion Ponzi
uncertainty after the institution filed a motion seeking a mistrial
following testimony of a key witness. TD Bank, being sued by Texas
investment partnership Coquina Investments, filed the motion after verbally
making the motion following questioning of its former Vice President, Frank
Spinosa, concerning his relationship with Rothstein. Under the threat of
possible pending criminal charges, Spinosa declined to answer the majority of
the questions posed by Coquina's attorney and took the Fifth amendment.
The Fifth Amendment applies to both criminal and civil
proceedings, and is available to a witness who may have reasonable apprehension
from providing a direct answer that may subject him or her to future criminal
prosecution. As eloquently stated by the Supreme Court in 1924,
The privilege is not ordinarily dependent upon the nature
of the proceeding in which the testimony is sought or is to be used.
It applies alike to civil and criminal proceedings, wherever the answer
might tend to subject to criminal responsibility him who gives it. The
privilege protects a mere witness as fully as it does one who is also a
McCarthy v. Arndstein,
266 U.S. 34, 40 (1924) [an enhanced version of this opinion is available to lexis.com
subscribers / unenhanced version available from lexisONE Free Case Law].
While it is well-established in American jurisprudence that a judge may
not allow a jury to make an adverse inference concerning a defendant's decision
to not testify in his case, the result is different when a defendant chooses to
testify but declines to answer based on the Fifth Amendment. As the
Supreme Court stated in Baxter v. Palmigiano [enhanced version / unenhanced version],
[T]he Fifth Amendment does not forbid adverse
inferences against parties to civil actions when they refuse to testify
in response to probative evidence offered against them: the Amendment
''does not preclude the inference where the privilege is claimed by a
party to a civil cause.''
425 U.S. 308, 317 (1976).
During the questioning, Spinosa took the Fifth amendment
to more than 170
questions over a morning of testimony. These questions included
whether Spinosa flew on a plane with Rothstein to a Super Bowl or whether
Spinosa accepted an envelope from Rothstein containing $50,000. Following
the questioning, United States District Judge Marcia Cooke granted a request by
Coquina to allow the jury to draw an adverse inference from Spinosa's decision
not to testify for fear of criminal prosecution. Judge Cooke ruled that
Coquina could propose an instruction to the jury to be considered during their
deliberation that "[y]ou can infer that the answers would have been
adverse to TD Bank's interest."
While TD Bank's attorneys seem to acknowledge that an
adverse inference may be taken from Spinosa's decision to plead the Fifth, they
take exception with Judge Cooke's apparent wording that seemed to acknowledge
that liability could be inferred.
For more news and analysis of Ponzi schemes, visit
Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.
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