Lawyers: Crush of Evidence Could Delay Fraud Trial

The government has more than 250 hours of secret tape recordings of one group of traders and brokers it has accused of fraud, a file so massive that the case may not come to trial until at least a year from now, lawyers said Wednesday.

The disclosure came during a federal court hearing called to set a trial date for more than a dozen traders and brokers of Japanese yen at the Chicago Mercantile Exchange who were indicted on fraud and racketeering charges earlier this month.

Lawyers representing the group told U.S. District Judge George Marovich that the government had agreed to turn over the tapes to defense lawyers to help them prepare for trial, in addition to granting them access to a “roomful of documents, probably numbering in the upper thousands.”

The defense lawyers asked the judge to set the trial for September, 1990, to allow them time to digest the material.

Taped at Work, Play

But Marovich lectured the cluster of lawyers standing elbow-to-elbow before his bench on the evils of procrastination, saying the more time people are given, the more time they take.

“Earlier is better,” he said. He then deferred a decision on the trial date until late next month.

The yen pit operators were among 46 traders and brokers at the Mercantile Exchange and the Chicago Board of Trade, the world’s largest futures exchanges, who were indicted after a 2 1/2-year investigation. FBI agents posing as traders secretly taped the accused at work on the floor and after hours in bars and restaurants.

The charges against the 46 include racketeering, mail fraud, commodities fraud, filing false income tax returns and lying to federal investigators. The government said they engaged in illegal trades, cheating customers and kicking back a percentage of the money skimmed into their personal accounts.

To date, three of the 21 yen-pit operatives who were indicted have pleaded guilty. At Tuesday’s court hearing, James Marren, 39, pleaded innocent to the charges against him, becoming the 14th person from the yen pit to plead not guilty. Others in the group have yet to enter pleas.

Court Appearances Awaited

Some of the 46 still have not been arraigned, including 19 from the Board of Trade soybean pit who are scheduled to appear in court late next week.

Lawyers for the yen traders told Marovich on Tuesday that the quality of the secret tapes the government has agreed to release to them is so poor “that it will take many, many multiples of the 250 hours . . . to transcribe them.” In addition, they said, it is possible other tapes may be made available later.

Under a schedule agreed to Tuesday by federal prosecutors and defense lawyers, pretrial motions would be concluded by March 5, 1990.

Marovich said he would prefer to see the trial start closer to March than September.

The groups of defendants have been assigned to different judges, meaning that there will be several separate trials in the case.