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United States v. Dioguardi

decided: May 27, 1970.


Moore, Friendly and Smith, Circuit Judges. J. Joseph Smith, Circuit Judge (concurring).

Author: Friendly

FRIENDLY, Circuit Judge.

Defendants were charged with the substantive crimes of fraudulently transferring and concealing the property of a bankrupt in contemplation of bankruptcy, and of fraudulently concealing the bankrupt's assets from the trustee in bankruptcy in violation of 18 U.S.C. § 152, and a conspiracy to do the same, 18 U.S.C. § 371. In 1967, after an 18 day jury trial in the District Court for the Southern District of New York, they were convicted on all three counts. We affirm.*fn1


The bankrupt, Consumers Kosher Provisions, Inc. (Consumers), was under the effective control of defendant John Dioguardi. Defendant David Perlman had the title of president and defendant Thomas Plumeri was an important employee. In the summer of 1964, while Consumers was experiencing serious financial difficulties, Dioguardi negotiated a contract with American Kosher Provisions, Inc. (American), a successful competitor. The contract, dated August 15, 1964, provided that American would purchase all Consumers' stock, represented to be 72 1/2 shares; assume its obligations, including five-year employment contracts with Dioguardi and Perlman; and take over operations pending the closing, which was to be not later than October 27. When the parties met that day, Consumers' attorney, J. Jack Brown, failed to produce a certificate for the 27 1/2 shares owned by the estate of Herman Rose, whose executrix had signed the contract; Brown claimed he had not had sufficient time to qualify her. It also turned out that, in addition to the 72 1/2 shares specified in the contract, there were another 27 1/2, owned by Morris Meat Market, Inc. Brown suggested that since all the officers, directors and stockholders of Morris were present, the shares could be transferred at that time although Morris' financial records indicated this might render it insolvent.

American's counsel naturally refused to permit his client to close. Two officers of American, Alpert and Krutchik, said that creditors of Consumers had been holding off pending the closing; that under the circumstances they would not consent to an extension; and that the following morning the creditors would be notified the deal was off. Alpert instructed Krutchik to take an inventory, with a representative of Consumers, and return the Consumers property located at its own plants. After complications unnecessary to detail, in which all three defendants were involved, the inventory was completed in the early morning hours of October 29, and defendant Plumeri gave a receipt for the goods. Later, American inventoried and returned the Consumers property that had been at American's plant; receipt of this property was also acknowledged by Consumers. According to American's recapitulation, the total property returned amounted to $32,452.57, valued at cost: Raw meat, finished and semi-finished products accounted for $10,071.54, and supplies, such as spices, casings, boxes and other containers, made up the balance.

Toward the conclusion of the inventory taken on October 29, Dioguardi told American's general manager that he was going into business under the name of First National Kosher Provisions, Inc. (First National), a hitherto inactive corporation he controlled. Operations were conducted in Consumers' plant and with its leased trucks. New books were opened and First National's name was substituted on Consumers' invoices and sales tickets. To obtain working capital, defendant John Dioguardi, along with defendant Perlman and attorney Brown, obtained from one Sol Lichter a $10,000 check to Dominick Dioguardi, payment of which John Dioguardi guaranteed. No note was given or time of payment specified, and the loan had not been repaid at the time of trial. This check and an additional $10,000 provided by John Dioguardi were used to open a First National account at the Central State Bank; Plumeri, Perlman and Dominick Dioguardi were listed as the corporate officers.

First National began business by utilizing Consumers' inventory; it had no other. The Government's evidence was that the entire Consumers inventory was so utilized. Haberman, an accountant engaged by Dioguardi, called him and reported that First National's profit figures for November were "unduly" high; Dioguardi promised an answer. At a meeting with Haberman shortly thereafter, Dioguardi and Plumeri produced an invoice purporting to represent the total pounds of Consumers' meat that First National had used. The figure $5523, although well below actual cost, was then assigned as the value of the meat and Haberman said he would carry this as a liability to Consumers. His workpapers so showed it, but it was not carried into First National's financial statements. Later Dioguardi remarked to Haberman that the $5523 would be paid to Consumers when First National received a bill. It never did.

On January 25, 1965, three creditors filed a petition in bankruptcy against Consumers. It was later adjudicated a bankrupt and, on March 2, 1965, Herman Sommers was appointed trustee. In the interval defendants moved First National from Blake Ave., Brooklyn, to East 180th Street in the Bronx, taking some of Consumers' equipment and fixtures with them. These were ultimately discovered by the trustee and, together with the fixtures and equipment left at Blake Ave., realized $3500. Consumers' estate, with debts of over $265,000, had no other assets.

Although much dust was scattered over details concerning the amount and value of the inventory that was used, the theory of defense was that attorney Brown had sanctioned the use of Consumers' inventory and plant as a means of attempting to salvage something for Consumers' creditors, although the latter were never advised of defendants' intentions. Brown, whose testimony was replete with inconsistencies, supported this to some degree. Plumeri was the only defendant to testify. Despite or perhaps partially because of this and other testimony adduced by the defense, it is apparent, without burdening this opinion with more detail, that the jury was abundantly justified in rejecting defendants' version and accepting the Government's theory that defendants deliberately aborted the closing with American and then helped themselves to Consumers' property. Appellants' contention of insufficient evidence thus borders on the frivolous, and we turn to claims of trial error.


Alpert, of American, was the first Government witness. During the luncheon recess, the prosecutors mentioned to him in the corridor that he had omitted to testify to several facts he had previously disclosed. On recross examination that afternoon he denied having talked with the prosecutors during the recess, other perhaps than to ask when he could return to Miami. At the conclusion of redirect examination the prosecutors requested a conference at sidebar and revealed the conversation. The judge asked defense counsel whether they wished to bring this out and proposed as alternatives a statement by the prosecutors or further examination of Alpert. Counsel insisted on a hearing outside the presence of the jury, which the judge denied. The prosecutor said he would not object if defense counsel wished to ask Alpert whether it wasn't a fact that he had spoken to the prosecutors in the corridor. The judge urged defense counsel to cooperate "to the extent of advising whether you wish that revealed to the jury or whether you think your clients would be in any way prejudiced by revealing it to the jury." When counsel declined, the court directed the prosecutors to tell the jury what had occurred.

The leading prosecutor then stated to the jury that, contrary to Alpert's testimony, he had told Alpert during the recess that he thought the latter "had purposefully omitted important testimony, damaging against the defendants, and that he sounded on cross-examination more like Mr. Brill's witness than the government's witness." He added that his associate had remarked about Alpert's failure to mention an offer by American to close if the sellers would furnish a surety bond for protection; the associate went into greater detail about this.*fn2 The judge then asked Alpert whether the prosecutors' statements were true. Alpert answered he "would imagine it is substantially about what they may have said." Defendants' motion for a mistrial was denied and, after a few further questions by defense counsel, Alpert was excused.

We have some difficulty in understanding just what is claimed to have been wrong about this. The court could not leave the record with a lie by Alpert known to the prosecutors but not disclosed to the jury, unless defendants preferred to waive the point -- which they were given an opportunity to do. If the criticism is that the prosecutors got before the jury not only Alpert's false answers but their belief that he had failed to give other damaging testimony, this was defense counsel's own doing; the prosecutor had offered to let them expose the prevarication simpliciter. Moreover, if the episode was to be brought out, as defense counsel had forced it to be, the prosecution was entitled under the principle of completeness, see 7 Wigmore, Evidence §§ 2094, 2097 (3d ed. 1940), to bring out the whole conversation, at least in the absence of serious prejudice to the defendants, so as to rebut, for example, any inference that the prosecutors had urged Alpert to lie. We likewise fail to see why, on what he had before him, the judge was compelled to order a hearing outside the presence of the jury. The purpose of such a hearing would have been to assist defense counsel in making an informed ...

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