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United States v. Clemente

decided: February 26, 1981.

UNITED STATES OF AMERICA, APPELLEE,
v.
MICHAEL CLEMENTE, TINO FIUMARA, THOMAS BUZZANCA, VINCENT COLUCCI, CAROL GARDNER, MICHAEL COPOLLA AND GERALD SWANTON, DEFENDANTS-APPELLANTS .



Appeals from judgments of conviction after a jury trial entered in the United States District Court for the Southern District of New York, Leonard B. Sand, Judge, convicting the defendants of violating the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962(c) and (d); the Hobbs Act, 18 U.S.C. § 1951; the Taft-Hartley Act, 18 U.S.C. § 186(b); the Internal Revenue Code, 26 U.S.C. §§ 7201 and 7206(1) (1976); and of committing perjury before a grand jury in violation of 18 U.S.C. § 1623 (1976). Affirmed.

Before Feinberg, Chief Judge, and Friendly and Meskill, Circuit Judges.

Author: Meskill

This case concerns racketeering activity that has plagued waterfront businesses in New York and New Jersey. Judgments of conviction were entered in the United States District Court for the Southern District of New York after a twelve-week jury trial before Judge Sand. The indictment contained 213 counts, charging the defendants with engaging in extortion in violation of the Hobbs Act, 18 U.S.C. § 1951 (1976); receiving bribes in violation of the Taft-Hartley Act, 29 U.S.C. § 186(b) (1976); conducting and conspiring to conduct an enterprise's affairs through a pattern of racketeering in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1962(c) and (d) (1976); evading taxes and filing false tax returns in violation of 26 U.S.C. §§ 7201 and 7206(1) (1976); and making false declarations before a grand jury in violation of 18 U.S.C. § 1623 (1976). A schedule listing the defendants' various convictions and the sentences imposed appears in the appendix.

BACKGROUND

The evidence offered by the government at trial depicted Michael Clemente as the ringleader of a highly organized enterprise that had infiltrated all aspects of waterfront business, including labor, shipping, and ship-servicing. Clemente's specific area of control was identified as the New York waterfront. The evidence described the other defendants as follows: Fiumara acted as the New Jersey waterfront "boss" but was subordinate to Clemente; Copolla was a personal assistant to Fiumara; Gardner and Colucci were presidents of two New Jersey International Longshoremen's Association (ILA) locals and answered directly to Fiumara in connection with their illicit activities; Buzzanca was president of two New York ILA locals and conducted his activities under the supervision of Fiumara; and Swanton, a vice-president of a shipping company in New York, worked closely with Clemente.

The linchpin of the enterprise was its control of the ILA in New York and New Jersey; with this power it was able to extort monies from shipping companies and influence their decisions regarding the allocation of ship-servicing contracts. The latter influence empowered the enterprise to extort monies from the companies that provided services such as the lashing and carpentry work required in connection with loading and unloading cargo. Only those shipping companies and ship-servicing companies that paid the amounts demanded by the enterprise, or "did the right thing" in the argot of the waterfront, had their ships' cargo loaded and unloaded without interruption or obtained and retained contracts to provide their services. The evidence adduced at trial largely concerned dealings between each of the defendants and the government's principal witness, William Montella, who was employed by several ship-servicing companies during the indictment years.

The Court-Authorized Surveillance

Between August 1977 and March 1978 the government monitored oral conversations through listening devices installed in Montella's offices, which had been authorized by court order pursuant to 18 U.S.C. §§ 2510-2520 (1976).*fn1 The intercepted conversations combined with physical surveillance of Montella provided the government with substantial proof of Montella's pattern of monthly deliveries of cash to the defendants Clemente and Buzzanca.*fn2 Montella was approached by the government in May 1978 and agreed to cooperate in June of that year.*fn3 From June through December 1978 Montella met with several of the defendants and successfully recorded sixteen of their meetings.*fn4

Additionally, several consensual recordings made in the course of an independent New Jersey state investigation were admitted into evidence. In one conversation Fiumara promised a New Jersey undercover officer certain waterfront business and, in another, Copolla described Fiumara's waterfront control and Copolla's own role as Fiumara's assistant.

The Netumar Account

From 1970 to 1972 New Jersey Export Co. (N. J. Export) served as the carpentry contractor for Netumar Steamship Line (Netumar), which operated from Pier 36 in Manhattan. At that time, Montella was the general foreman for N. J. Export. Montella testified that beginning in 1970 or 1971 defendant Swanton, then a vice-president of Netumar, threatened that unless Montella agreed to "do the right thing" Swanton would "throw them out" and find another company that would make the payoffs demanded. Swanton informed Montella that he was associated with Clemente, who was the behind-the-scenes boss who ran the East River Piers in Manhattan, and that some of the kickback money would be given to Clemente. When Montella asked Swanton how he was expected to raise the cash to make the payoffs, Swanton instructed him to inflate his materials bills. Montella agreed to make the payoffs and admitted that he later kept some of the money generated in this manner for himself.

When Montella left N. J. Export to join a Brooklyn-based company, C.C. Lumber Co., he asked Swanton whether his new employer could obtain the Netumar account. Swanton denied the request, asserting as his reason Clemente's dislike for Anthony Scotto, the Brooklyn ILA local president.

In June 1973 Montella left C.C. Lumber and joined Quin Lumber, another Brooklyn-based carpentry and lashing company. Quin Lumber's employees, like those of C.C. Lumber Co., belonged to the ILA Brooklyn local run by Anthony Scotto. In early 1974 Swanton called Montella and advised him that Clemente had resolved his differences with Scotto and that, therefore, Montella's Brooklyn employer could now obtain the Netumar account. Thereafter, they arranged a meeting where Swanton told him: "Listen go to the Shelton Health Club. Ask for Mike C. Give him 500. Give him 500 a month Give him 500 and make him happy." Montella testified that shortly thereafter he met Clemente at the Shelton Health Club, where the following exchange took place:

MONTELLA: Mike, I'm Sonny (Montella). Gerry (Swanton) told me to come down. I'm with Quin Lumber and I'm going to be doing the carpentry work down there.

CLEMENTE: I hope you do the right thing. I hope you are not cheap.

MONTELLA: I'm going to give you 500 a month.

CLEMENTE: Okay. If you have any problems down there let me know. Go out and make money.

Montella testified that some time in April or May 1974 he returned to the Shelton Health Club and handed Clemente $500 in cash in a white envelope. Thereafter, Montella delivered $500 in the same manner once a month through December 1976. Montella testified that he continued to make the payments because he feared that if he stopped he would lose the Netumar account.

In 1976 Montella placed a bid with Netumar for the contract to perform the lashing work in addition to the carpentry services his company already was providing. When Montella's bid was rejected, he approached Clemente for assistance. Clemente gave Montella instructions; Montella followed them and was subsequently awarded the lashing contract with Netumar. Later, Clemente asked for another $500 per month and Montella acquiesced. Thereafter, from January 1977 through December 1978 Montella paid Clemente $1,000 in cash at their monthly meetings at the Shelton Health Club.

During the same period in which Clemente was receiving payoffs from Montella, he had also arranged to receive $200,000 per year from Netumar itself. When Netumar began its operations at Pier 36 in Manhattan, it believed that it was being grossly overcharged by its stevedore, United Terminals, Inc. (United). Charles Mattmann, Netumar's president, approached officials of United and attempted to negotiate a reduction of the $800,000 annual equipment rental fee it was paying or to buy the equipment outright. United offered to sell the equipment for $1 million, a price considered excessive by Mattmann. Mattmann then approached Clemente for assistance. Clemente offered to intervene provided that Mattmann agreed to pay him 25 cents for each dollar Clemente saved Netumar. Following Clemente's intervention United sold the equipment for $300,000. Thereafter Netumar paid Clemente $200,000 in quarterly cash installments each year. Netumar made these payments from 1973 through 1978 in restaurants in Brooklyn and Manhattan.

The Concordia Line Account

In June 1975 another shipping company, the Concordia Line, decided to move its operation from Hoboken, New Jersey, to Newark. Castelo and Sons Ship Servicing Co., which had been providing the lashing work for Concordia in Hoboken about this time, was approached by defendant Carol Gardner, the president of the black ILA local in Newark. Gardner advised Manuel Castelo and Joseph Castelo, Jr. that they would have to pay him certain amounts of money to retain the Concordia account once it moved to Newark. The Castelos, who were friends of Montella, informed him about Gardner's demands.

Montella subsequently contacted Gardner and inquired about the Concordia Line account. Gardner told Montella to meet him and his "partner," defendant Vincent Colucci, in Miami to discuss the matter. Colucci was then president of the white ILA local in Newark. Montella met with Gardner in Miami but did not reach a final agreement. They continued their discussions in New York, where Montella ultimately agreed to pay Gardner and Colucci $10,000 cash up front and $2,000 cash each month for the Concordia Line account. Montella also agreed to pay secretly to Gardner an additional $10,000 cash and promised not to disclose this clandestine payment to anyone, including Colucci. In August 1975 Montella met with Gardner and handed him $20,000 in cash. In September 1975 Montella was advised by a Concordia Line official what rates to bid and shortly thereafter was awarded the contract.

Although it had been agreed that Gardner and Colucci would share Montella's $2,000 monthly payoffs, Montella soon began to receive separate demands for the money from each of them. Each month Montella paid Gardner but, nevertheless, received an additional demand from Colucci. Montella arranged a meeting among the three of them to attempt to straighten out the problem, but the meeting achieved less than satisfactory results.

Afraid that he would continue to be "double-banged," as he later termed it, by Gardner and Colucci, Montella arranged a meeting with Clemente to seek his assistance. Montella met with Clemente at the Shelton Health Club in December 1975 and explained the situation to him. Clemente informed Montella that had he approached him initially he could have avoided paying any money to Colucci and Gardner. Clemente admonished Montella, however, that "(n)ow you made a commitment you got to live up to it." Although Clemente insisted that Montella live up to his "commitment," he advised him to see the defendant Buzzanca and "tell him you are with me and tell him the story."

Subsequently, Montella adventitiously met Clemente and Buzzanca at a restaurant in Manhattan. Clemente introduced Montella to Buzzanca and requested that he recount his story to Buzzanca. Buzzanca apologized to Clemente for the trouble that Montella had experienced and promised to clear up the problem. Buzzanca told Montella to make the monthly payments directly to him in the future. When Gardner and Colucci next called him, Montella informed them that he had been instructed not to make his monthly payoffs to them any longer and that they would be receiving instructions as well. Montella did not again hear from Gardner or Colucci in connection with this matter.

Montella complied with Buzzanca's directions and paid him $2,000 cash at Buzzanca's office. The first payment was made in the presence of defendant Fiumara, whom Buzzanca had asked to listen to another rendition of Montella's Concordia story. Montella continued to deliver the $2,000 cash payments to Buzzanca at his office or in the men's room of a New York restaurant.*fn5 Montella testified that the payments he made to Buzzanca were handed over to Buzzanca's boss, defendant Fiumara. The payments continued through December 1978 when Fiumara himself picked up a $2,000 payment.

The Chilean Line Account

In 1975, during the same period in which Gardner and Colucci succeeded in coercing Montella to pay $2,000 per month for the Concordia Line account, they advised Montella that unless he paid them an additional $2,000 per month he would lose his account with the Chilean Line. Montella protested that he had obtained the Chilean account many years before in Brooklyn, and that it would be unfair to demand cash from him to retain it. Gardner replied, "Wrong, that's my account," and advised Montella that to retain the account he had to pay the amount they were demanding. Montella testified that the following dialogue ensued:

MONTELLA: I got to get out? Just like that I got to get out?

GARDNER: That's it.

COLUCCI: That's it.

MONTELLA: First I buy the Concordia Line and now all of a sudden I am getting thrown out of the Chilean Line.

GARDNER & COLUCCI: That's what the boss said, the boss wants you out.

MONTELLA: The boss, who is the boss? I thought you were the boss.

GARDNER: You don't know who the boss is?

MONTELLA: No.

GARDNER: T is the boss.

Montella testified that "T" was the defendant, Tino Fiumara. Montella subsequently advised the vice-president of the Chilean Line that he would no longer "do his vessels in the Port of New Jersey because it was just a little too expensive to do his business."

Clemente and Fiumara The Bosses of the Enterprise

The government introduced tape recordings of conversations in which several of the defendants professed their loyalty to defendant Fiumara and recognized his authority over them. Buzzanca, for example, stated on one occasion:

Tino's good point is that everybody fears and respects him. That's a good thing

I love Tino and I would do anything in the world

I love him. I love him. And I got to. Ya know like, and I live with him everyday. I absolutely think, if this guy tempers himself, he'll be, ten years from now, he'll be awesome He'll have the best of two worlds. Good sense, good judgment. Plus, which we all live under fear. Ya need to have that balance (We'll) make money. We'll steal it, if we have to.

Somehow I get in fact, I notice in Tino and more than Mike. I come from the greatest guy in the world.

On another occasion, the following statement was made by defendant Gardner concerning defendant Fiumara:

I don't make no move until I, you know, check with, I do the right I don't have the last decision.

I say I'm very loyal to this guy.

Additionally, the government offered evidence of numerous instances in which Fiumara coordinated activities and meetings among Copolla, Buzzanca, Colucci, and Gardner.

Fiumara's authority on the waterfront, however, was not supreme. The government introduced a great deal of evidence demonstrating that Fiumara was subordinate to Clemente. For example, Clemente's handling of Montella's problems with Gardner and Colucci, who answered directly to Fiumara, demonstrated Clemente's power to control Fiumara's subordinates, and thus Fiumara. Additionally, in 1978 Clemente was able to arrange increased business for Montella on the New Jersey waterfront, Fiumara's territory, illustrating Clemente's commanding position in the enterprise. After Fiumara acceded to Clemente's request that Montella be given more business, Clemente boasted that "Tino give me some satisfaction." Finally, Clemente took steps to protect the enterprise from investigations, evincing his patriarchal role. For example, the ...


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