United States v. Feldman

First Guaranty Metals (FGM) invested funds in precious metal futures before filing for bankruptcy. The next day, FBI agents searched FGM’s offices, and the Commodity Futures Trading Commission (CFTC) filed a complaint alleging FGM defrauded customers due to its salesmen’s misrepresentations. The CFTC sought to disgorge FGM’s profits and deposed three of its former executives: president Herbert Sandburg, who left FGM five months beforehand, and Richard Feldman and Richard Martenson (defendants), both top-tier managers. All three received notices of the depositions, but Feldman and Martenson did not attend or have attorneys represent them at Sandburg’s deposition. One day beforehand, Sandburg agreed to cooperate with the government and testify against Feldman and Martenson in exchange for not being targeted in criminal proceedings. The government did not disclose Sandburg’s agreement until just before Feldman and Martenson’s criminal trial almost a year later. Meanwhile, the government knew Sandburg was terminally ill, and he died less than a month after his deposition. When the government indicted Feldman and Martenson for fraud, the district court admitted Sandburg’s deposition as the centerpiece of the prosecution. Both were convicted and appealed, arguing that admitting the deposition violated their right to cross-examine witnesses against them.