The opinion of the court was delivered by: SAND
After an eleven week trial, defendants Clemente, Fiumara, Buzzanca, Colucci and Gardner were convicted by a jury, on May 2, 1980, of violating the Taft-Hartley Act, 29 U.S.C. Section 186 and 18 U.S.C. Section 2, the Hobbs Act, 18 U.S.C. Section 1951 and 18 U.S.C. Section 2, the federal Racketeering (RICO) Statute, 18 U.S.C. Section 1962(c),
and of conspiring to violate the RICO Statute, 18 U.S.C. Section 1962(d). Defendant Copolla was convicted of conspiring to violate the RICO Statute; however, the jury was unable to reach a verdict on the two Hobbs Act counts, the two Taft-Hartley counts, and the RICO count, with which he was charged.
Defendant Swanton was convicted of violating the Hobbs Act, 18 U.S.C. Section 1951, 18 U.S.C. Section 2, and of making false material declarations before a grand jury, 18 U.S.C. Section 1623. Defendants Clemente, Fiumara, Colucci and Gardner were also convicted of filing false income tax returns, 26 U.S.C. Section 7206(1); and defendant Clemente was also convicted of income tax evasion, 26 U.S.C. Section 7201.
All the defendants have moved for a judgment of acquittal or a new trial, and we amplify herein the grounds upon which those motions were denied from the bench.
At the outset, it would be appropriate to give a brief overview of the structure of the indictment. The 157 counts which were contained in the indictment considered by the jury, during its deliberations,
may be summarized as follows:
Count 1 (hereafter the RICO count) charged that from on or about January 1, 1971 until the filing of the indictment, in violation of 18 U.S.C. Sections 1962(c) and 2, defendants Clemente, Fiumara, Buzzanca, Colucci, Gardner and Copolla were
"persons employed by and associated with an enterprise, to wit, a group of individuals associated in fact to corruptly control and influence the waterfront industry in the port of New York and other ports in the eastern United States."
The RICO count further alleged that the affairs of such enterprise were conducted
"through a pattern of racketeering activity, which included, among other things, acts of extortion in violation of Title 18, United States Code, Sections 1951 and 2, and receipt of unlawful payments in violation of Title 29, United States Code, Section 186(b), and Title 18, United States Code, Section 2."
Counts 3 through 142 were alleged as predicate offenses of the RICO count.
Count 2 alleged a conspiracy to commit the offense alleged in the RICO count by the defendants named therein. The payments and acts specified in Counts 3 through 142 were alleged as some of the overt acts committed by the defendants and their co-conspirators in furtherance of the conspiracy.
Counts 3 through 6 alleged that Gardner and Colucci, in violation of 18 U.S.C. Sections 1951 and 2, extorted or attempted to extort from Quin Marine Services, Inc. (hereafter "Quin") the four payments therein alleged, each payment forming the basis for a separate count. The indictment charged that each of the payments were "demanded and received as a condition of and in exchange for Quin receiving and retaining the carpentry and lashing business from Concordia Line in Newark, New Jersey."
Counts 8 through 11, predicated on the same four payments set forth in Counts 3 through 6, alleged that the defendants Gardner and Colucci, as representatives of employees employed in an industry affecting commerce, received illegal labor payments in violation of 29 U.S.C. Section 186(b) and 18 U.S.C. Section 2.
Count 13 alleged that Gardner and Colucci attempted to extort monthly payments from Quin in exchange for its retaining its rights to perform work for the Chilean Line in Newark, New Jersey, in violation of 18 U.S.C. Sections 1951 and 2.
Counts 14 through 48 alleged that from on or about January, 1976 through December, 1978 Fiumara and Buzzanca, specifically aided and abetted by Copolla in Counts 36 and 43, extorted or attempted to extort monthly cash payments of $ 2,000 from Quin in order to retain the Concordia Line work. It was also alleged that until May 19, 1978, Quin and Castelo and Sons Ship Servicing, Inc. provided an equal share of these monthly payments. Thereafter, all of the money for the payments came from Quin. Each of the 35 alleged payments formed a separate count under 18 U.S.C. Sections 1951 and 2.
Counts 49 through 83 paralleled each of the payments alleged in Counts 14 through 48 and alleged that Buzzanca, being an employee's representative, Fiumara, Clemente and, with respect to Counts 71 and 78, Copolla, demanded and received said payments in violation of 29 U.S.C. Section 186(b) and 18 U.S.C. Section 2.
Counts 84 and 85 were alleged against Buzzanca and Gardner, respectively, and each count alleged a $ 1,000 cash payment from Quin in violation of 29 U.S.C. Section 186(b).
Counts 87 through 142 alleged that from on or about January, 1974 through December, 1978, Clemente, aided and abetted by Gerald Swanton, attempted to affect commerce by extortion and did obstruct, delay and affect commerce by extortion, in that Clemente obtained monthly payments totaling more than $ 42,000 from Quin in exchange for Quin's obtaining and retaining carpentry and lashing business from Netumar Line at Pier 36, Manhattan. Each such alleged monthly payment was set forth as a separate count under 18 U.S.C. Sections 1951 and 2.
Counts 143 through 146 alleged that Gerald Swanton made false material declarations before a grand jury investigating whether Clemente, or anyone else, had participated in extortion, racketeering, illegal labor payments and tax evasion. Each false statement was alleged as a separate violation of 18 U.S.C. Section 1623.
Counts 147 through 156 were income tax charges against Michael Clemente. In Counts 147, 149, 151, 153 and 155, he was charged with evading the payment of federal income taxes on more than $ 900,000 in payments he was charged with receiving for the years 1973, 1974, 1975, 1976 and 1977, in violation of 26 U.S.C. Section 7201. Counts 148, 150, 152, 154 and 156 charged Clemente with filing false personal tax returns for those five years for not reporting those payments in violation of 26 U.S.C. Section 7206(1).
Count 157 alleged that Fiumara omitted a substantial amount of income from his 1976 adjusted gross income in his 1976 federal income tax return in violation of 26 U.S.C. Section 7206(1), and Count 158 contained a similar charge against this defendant with respect to his 1977 return.
Count 159 alleged that Colucci omitted a substantial amount of income from his 1975 return and Count 160, the last count, alleged that Gardner similarly omitted a substantial amount of income from his 1975 return, in violation of 26 U.S.C. Section 7206(1).
In addition to these 157 counts, the indictment considered by the jury sought forfeiture of the interests of certain defendants pursuant to 18 U.S.C. Section 1963.
With the exception of defendant Copolla, each of the defendants was convicted on every count in which he was charged in the indictment.
At the pretrial stage of this case, the defendants, with the exception of Swanton, moved for severance based on claimed misjoinder under Rule 8 of the Federal Rules of Criminal Procedure. Rule 8 provides:
"(a) Joinder of Offenses. Two or more offenses may be charged in the same indictment or information in a separate count for each offense if the offenses charged, whether felonies or misdemeanors or both, are of the same or similar character or are based on the same act or transaction or on two or more acts or transactions connected together or constituting parts of a common scheme or plan.
"(b) Joinder of Defendants. Two or more defendants may be charged in the same indictment or information if they are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses. Such defendants may be charged in one or more counts together or separately and all of the defendants need not be charged in each count."
When a defendant in a multiple-defendant case attacks the joinder for trial with defendants who are named in counts with him or in other counts, Rule 8(b) governs. United States v. Turbide, 558 F.2d 1053, 1061 n.7 (2d Cir.), cert. denied sub nom., Perez v. United States, 434 U.S. 934, 98 S. Ct. 421, 54 L. Ed. 2d 293 (1977); United States v. Papadakis, 510 F.2d 287, 300 (2d Cir.), cert. denied, 421 U.S. 950, 95 S. Ct. 1682, 44 L. Ed. 2d 104 (1975).
When a defendant in a multiple defendant case named in one count seeks to sever other counts in which he alone is charged, Rule 8(a) controls. United States v. Isaacs, 493 F.2d 1124, 1158 (7th Cir.) (per curiam, Lumbard, J. on panel), cert. denied, 417 U.S. 976, 94 S. Ct. 3184, 41 L. Ed. 2d 1146 (1974).
In its opinion of July 11, 1979, the Court noted that the Government had correctly categorized the defendants' motions as follows:
"The defendants allege misjoinder here on three principal grounds. First, they attempt to parse the indictment's conspiracy and racketeering charge into what they perceive to be sub-enterprises or sub-conspiracies, and then argue duplicity and misjoinder of these allegedly "separate' enterprises or conspiracies. Second, they extend this claim to the various counts alleging the predicate offenses to the racketeering count and assert these too must be separated along the lines of the alleged sub-conspiracies. Finally, they claim that various miscellaneous charges, for example, the tax counts . . . are misjoined both as to defendants and charges." Govt. Memo, p. 18.
In response to these contentions, the Government argued that Counts 1 and 2, the central allegations in the indictment, charged defendants Clemente, Fiumara, Buzzanca, Colucci, Gardner and Copolla with conducting and participating in the affairs of an enterprise through a pattern of racketeering activity and with a conspiracy to do so. It contended that joinder was proper because Counts 1 and 2 linked the defendants together in a common plan and common action, and because both counts explicitly incorporated by reference the substantive predicate charges (Counts 3-142). Govt. Memo at 20. The Government further represented that joinder of the tax and false declaration counts was proper because they were offenses growing out of and depending substantially for their proof on the facts necessary to prove the underlying charges. Id. at 26.
The indictment alleged that
"7. It was a part of the pattern of racketeering activity that Michael Clemente, the defendant, had as his principal territory and area of influence and control Piers 36 and 42, East River, Manhattan, and certain companies doing business on those piers and elsewhere, and certain entities doing business with these companies; and that Tino Fiumara, Thomas Buzzanca, Vincent Colucci, Carol Gardner, and Michael Copolla, the defendants, had as their principal territory and area of influence and control the New Jersey portion of the Port of New York, primarily Newark, and companies doing business within that territory, and certain entities doing business with these companies.
"8. It was further a part of the pattern of racketeering activity that Tino Fiumara, the defendant, did supervise, direct and control many of the activities of Thomas Buzzanca, Vincent Colucci, Carol Gardner, and Michael Copolla, the defendants, as members of the enterprise.
"9. It was further a part of the pattern of racketeering activity that Michael Clemente, the defendant, did exercise influence over and with officials of the ILA."
In its offer of proof, the Government stated:
"The group of individuals associated in fact to form . . . (the RICO) enterprise had one common objective: the corrupt control and influence over the waterfront industry in the Port of New York and other ports in the Eastern United States in order to enrich themselves and their associates. The defendants' efforts to achieve this objective centered upon their establishing and maintaining control and influence over waterfront companies and unions and then demanding tribute for the benefits of labor peace and systematically promoting and distributing work among selected companies in exchange for payoffs.
"In order to enhance the effectiveness of this corrupt system and as a part of the overall plan and pattern of control, the defendants maintained and recognized each other's areas of control and domination with the overall enterprise. The indictment charges and proof at trial will show that, although Clemente and Fiumara concentrated their activities in different geographic areas, the two men worked together in conducting the affairs of the enterprise. Clemente directed how certain payments regarding Concordia Line were to be made to Fiumara, and both men pooled their efforts to acquire more business for Quin Marine Services . . . in connection with that company's payments.
"By and large, the charges proving the RICO conspiracy relate to payoffs demanded and obtained from one victim, Quin Marine Services, in return for the privilege of Quin's doing business at various locations within the Port of New York. While the enterprise's efforts to bring . . . (Quin) . . . directly within its system of payoffs began in late 1973 or early 1974, the background of these efforts goes back even further."
(Govt. Memo) at 2-3 (citations omitted)
In light of the Government's representations, the Court denied the defendants' motions for severance. At trial, the defendants renewed their misjoinder contentions, and the Court again denied them, having concluded that the essential representations put forth by the Government had indeed been substantiated, and that the initial joinder rulings were appropriate. The Court now reexamines these rulings in the light of the evidence introduced during the trial.
At trial, the Government introduced much of its evidence through its principal witness, William Montella, Jr.,
formerly the General Manager of Quin, and through tape recordings. Carol Gardner and Gerald Swanton were the only defendants who testified.
The evidence adduced by the Government at trial showed that beginning in 1970 or 1971, while New Jersey Export Company, a carpentry and lashing concern, was doing work for Netumar Line at Pier 36 Manhattan, Gerald Swanton, a Netumar vice-president, demanded kickbacks from William Montella, Jr., in order for New Jersey Export to retain the Netumar account. (Montella, T. 3259, 3270, 3271).
Montella paid Swanton because he did not want New Jersey Export to lose Netumar business. (Id., T. 3280, 3281). After he began paying Swanton, Swanton told Montella that he gave some of this money to Michael Clemente, the "boss" behind the scenes who ran the East River piers. (Id., T. 3273). Swanton told Montella that he was "with Mike," that nothing "moved" on the piers unless Clemente approved. (Id., T. 3273). He similarly told William Fiumara,
a Netumar employee, that Clemente was a powerful man. (Fiumara, T. 2793, 2794). James Ryan, another Netumar employee, would drive Swanton on occasion to meet Clemente. (Ryan, T. 2778). After a ship sailed, Montella would hand Swanton or William Fiumara an envelope. (Fiumara, T. 2867-69, 2946). (Ryan, T. 2779).
Montella continued to pay Swanton up until the time he left New Jersey Export in September 1972 for C. C. Lumber Company. (Montella, T. 3283). C. C. Lumber was owned by Joseph Lacqua, a cousin of Anthony Scotto, the president of the ILA Local 1814 in Brooklyn and the vice-president of the International. (Id., T. 3286, 3287). Before leaving New Jersey Export for C. C. Lumber, Montella asked Swanton whether he could bring the Netumar account to his new company. (Id., T. 3287). Swanton indicated that this would not be possible because his "guy," i. e., Clemente, and Scotto did not "get along." (Id., T. 3286-87).
By the early part of 1974, Montella had left C. C. Lumber to work for Quin Lumber, a predecessor of Quin Marine Services. (Id., T. 3290, 3292). After Swanton had initiated a meeting, Montella went to see him. (Id., T. 3292). Swanton explained that Clemente and Scotto were now friendly, and that he wanted Montella to have Netumar's business. (Id., T. 3294). He further indicated that he would soon be leaving Netumar, and that he wanted Montella to meet Clemente at the Shelton Health Club and pay him $ 500 a month directly for the Netumar carpentry account. (Id., T. 5203). In March or April of 1974, Montella met Clemente as Swanton had directed and agreed to pay him $ 500 a month for the Netumar carpentry account. (Overt Act 1) (Id., T. 3295). After the first ship came in, Montella went to see Clemente at the Shelton Health Club and paid him $ 500 in cash in a white envelope. (Id., T. 3298). Thereafter, until January 1977, he paid Clemente $ 500 a month, as alleged in extortion counts 87 through 119, because he believed that if he failed to make those payments, he would lose the carpentry account. (Id., T. 3301, 3323, 3329). In January 1977, after Clemente had secured the Netumar lashing account for Quin Marine, in addition to the carpentry work, Montella agreed to increase his payments to $ 1,000 a month (Overt Act 13). (Id., T. 3308, 3311). Montella gave Clemente $ 1,000 a month in an envelope up through December 8, 1978, as alleged in extortion counts 120 through 142.
(Id., T. 3329). He feared that if he failed to make those monthly payments, Clemente would have Quin replaced and Quin would lose the Netumar account. (Id., T. 3322, 3329).
During this same period of time when Swanton and then Montella were seeing and paying Clemente, Clemente used his position of power on the East Side Piers to obtain approximately $ 200,000 a year from Netumar Line in exchange for certain economic benefits obtained for Netumar in connection with its Pier 36 operation. (The "Netumar payments"). Initially, Clemente discussed aspects of pier operations with Swanton. (Swanton, T. 10,408). Later, he established a relationship with Walter Gainsbury and Charles Mattmann, the owner and the president of Netumar Line, respectively. Swanton had told Mattmann that Clemente was "the man behind the scenes" on Pier 36 (Mattmann, T. 1696), and he arranged for Mattmann to meet Clemente. (Id., T. 1705). Montella knew that Clemente was meeting with high Netumar officials. (Montella, T. 3310).
In 1972, Netumar concluded that Irving Held, its stevedore, who had been recommended by Fred Field, an ILA official, was charging an exorbitant fee for the use of his equipment on Pier 36. (Mattmann, T. 1723, Gainsbury, T. 2253-55). After Netumar failed to persuade Held either to sell the equipment at a reasonable price or substantially reduce the rental charge, Gainsbury and Mattmann decided to approach Clemente. (Mattmann, T. 1731-34). Clemente agreed to investigate the matter, with the understanding that he would receive 25 cents on every dollar he could save Netumar. (Id., T. 1745). After Clemente intervened, Held decided to sell his equipment at a substantially reduced price. As a result, Gainsbury agreed to give Clemente approximately $ 200,000 in cash each year. (Mattmann, T. 1746; Gainsbury, T. 2274). These secret payments, made in cash and surreptitiously delivered, continued from 1973 through 1978.
(Mattmann, T. 1812, 1842).
In June 1975, Quin became involved in the New Jersey segment of the defendants' enterprise. At that time, the Castelos, owners of Castelo and Sons Ship Servicing, Inc., were approached by Carol Gardner, who demanded money in exchange for the right to do the work of Concordia Line, which was then moving to Newark. (Castelo, T. 6020).
The Castelos had previously dealt with Gardner, who had at one time demanded $ 1,000 a month from them in exchange for their right to retain the lashing work of Ecuadorian Line. (Overt Act 2), (Castelo, T. 5957, 5968). After discussing that matter with Dennis Meenan, the President of Ecuadorian Line, the Castelos acceded to Gardner's demand,
(Overt Act 3), (Castelo, T. 5968, 5974-75), (Meenan, T. 6173), and made monthly payments to him of $ 1,000 from April 1975 through the first part of 1978. (Castelo, T. 5977, 5978), (Cline, T. 8264, 8276), (Kelley, T. 7717).
The Castelos told Montella of Gardner's demand for kickbacks for the Concordia Line account. (Castelo, T. 6026), (Montella, T. 3346-47). Thereafter, Montella was in contact with ...