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United States v. Walsh

decided: February 11, 1983.

UNITED STATES OF AMERICA, APPELLEE,
v.
CHARLES T. WALSH AND BOWE, WALSH & ASSOCIATES, DEFENDANTS-APPELLANTS



Appeal from final judgments entered in the United States District Court for the Eastern District of New York (Pratt, J.), convicting appellants of conspiracy and violations of the Hobbs Act, Travel Act and RICO. Affirmed.

Friendly, Meskill and Cardamone, Circuit Judges.

Author: Cardamone

CARDAMONE, Circuit Judge:

Charles T. Walsh and Bowe, Walsh & Associates (BWA) appeal from judgments of conviction entered on February 16, 1982 in the United States District Court for the Eastern District of New York following a jury trial before the Honorable George C. Pratt. We affirm.

I BACKGROUND

This case centers around BWA, a Long Island-based engineering firm, and Walsh, its senior partner and principal owner. Over a 12-year period ending in 1979 appellants engaged in an audacious pattern of corrupt and illegal activities in New York, New Jersey and Connecticut. As consulting engineers on a number of major sewer construction projects in the tri-state area, and with the connivance of others, appellants extorted money from project contractors under their control and fraudulently overstated payment claims. Equally outrageously appellants then used the proceeds of these illegal actions to bribe public officials in order to obtain additional contracts and other forms of preferential treatment from the municipalities they were ostensibly serving. Appellants' actions bring to mind George Jacques Danton's famous phrase -- l'audace, encore de l'audace, toujours de l'audace (audacity, more audacity, always audacity) -- coined during a speech delivered before the French Legislative Assembly in 1792. H. Stephens, The Principal Speeches of the Statesman and Orators of the French Revolution 1789-1795 166 (1891).

In 1967 Walsh, who made all of BWA's major management decisions and top-level client contacts, informed Edward Higgins, the second-ranking employee of BWA, that he needed cash to make payments to various politicians and elected officials in Rockland County, New York. At that time BWA was serving as primary consulting engineer on a major sewer project in Rockland County (the Rockland Project). Shortly after Walsh and Higgins conversed, they met with Paul Mundt, then Chairman of the Rockland County Sewer District's Board of Commissioners. Mundt agreed to use his position on the Board to resolve favorably any problems regarding bills submitted to Rockland County by BWA. In exchange Walsh agreed to overstate payment claims of Rockland Project contractors (which BWA had responsibility to review before submission to the County), take kickbacks on the resulting overcharges from the contractors whose claims were inflated, and remit a fixed percentage of the kickbacks to Mundt. At Walsh's direction, Higgins inflated several contractors' payment certificates, collected cash kickbacks from the contractors, and stored the cash in a safe deposit box in his own name. The cash was delivered to Walsh when needed for payment to Mundt. Higgins was assisted in these activities, again at Walsh's direction, by Martin Gabey, another BWA employee.

In addition to the payoffs to Mundt, Higgins and Walsh also paid off officials of the Township of Parsippany-Troy Hills, New Jersey where BWA held a similar primary consultant position on a major sewer project (the Parsippany Project). In particular, Walsh directed Higgins to make regular cash payments to Max Auerbach, Business Administrator of Parsippany-Troy Hills, in order to resolve problems created by the Township's dilatory payments to BWA. Having greased the ways, the processing of BWA's payment claims was expedited. After Higgins left BWA in 1974, Walsh himself delivered the periodic payments to Auerbach. Payments were also made to Parsippany's mayor.

In 1971 Walsh arranged for payments to a public official of Wallingford, Connecticut, still another municipality engaged in a large scale sewer project (the Wallingford Project). The official paid in this instance was one Guy Pilla, then Chairman of Wallingford's Public Utility Commission. The payments to Pilla totaled over $5,000 and on one occasion in 1971 Walsh actually passed $2,000 to Pilla in the men's room of a Connecticut restaurant. Although Pilla later insisted that the payments were merely a loan, he never made any attempt to repay Walsh. Between 1970 and 1977 the Commission, which granted and supervised engineering contracts on behalf of the town, approved a series of BWA contracts and proposals relating to the Wallingford Project. Pilla consistently voted to approve BWA proposals.

In 1971 BWA also received lucrative engineering contracts on a municipal works project in Suffolk County, New York (the Suffolk Project). These contracts were purportedly obtained with the assistance and influence of Nicholas Barbato, then Chairman of the Smithtown, Long Island Republican Committee, to whom BWA had promised a kickback of three percent of its design fees. Instead of inflating contractors' claims to raise the cash needed for the payoff to Barbato, the modus operandi in the Rockland and Parsippany Projects payoffs, Walsh and Higgins extorted the necessary cash from Suffolk Project contractors with threats of economic reprisals.

Yet another in the saga of sewer projects on which BWA worked was one located in Camden County, New Jersey (the Camden Project). BWA received a contract on the Camden Project in 1977 after promising Camden Mayor Angelo Errichetti $40,000 for his help in getting it. Walsh later mailed Errichetti a BWA proposal for a study of the City of Camden's sewer system. Errichetti initially refused to cooperate on this proposal because BWA had failed to come through on the earlier promised $40,000. On August 8, 1979 Vincent Cuti, General Counsel for BWA, met with Mayor Errichetti at a hotel in Cherry Hill, New Jersey. Unfortunately for appellants the meeting was also attended by informant Melvin Weinberg and F.B.I. undercover agent Anthony Amoroso, both participants in an ongoing ABSCAM investigation of Errichetti. At the meeting Cuti said that BWA had attempted to deliver the $40,000 bribe to Errichetti for his influence on the Camden Project contract, that he would "straighten out" the problem caused by Errichetti's failure to receive the bribe, and that BWA wished to obtain work in the City of Camden. On August 20 Walsh and Cuti met with Errichetti, Amoroso and Weinberg in New York City. During this meeting Walsh reaffirmed that Errichetti would soon be paid to "rejuvenate" BWA's proposal for work in Camden. Finally, on September 10, 1979 Errichetti traveled to New York City where Cuti passed $10,000 in cash to Weinberg stating that "this is for the mayor." Weinberg and Amoroso then delivered the payment to Errichetti.

On April 22, 1981 a federal grand jury returned a seven count indictment against Walsh, BWA and four other defendants: Barbato, Cuti, Errichetti, and Gabey. Count one charged Walsh and Gabey with conducting the affairs of BWA through "a pattern of racketeering activity" in violation of 18 U.S.C. § 1962(c), part of the Racketeer Influenced and Corrupt Organizations Act (RICO). Count two charged Walsh, BWA and Gabey with conspiracy to defraud and commit offenses against the United States in violation of 18 U.S.C. § 371. Count three alleged that Walsh and Gabey traveled in interstate commerce with the intent to make illegal payments to public officials in violation of the Travel Act, 18 U.S.C. § 1952. Count four charged Walsh and Gabey with extortion in violation of the Hobbs Act, 18 U.S.C. § 1951. Counts five and six charged Walsh, Errichetti and Cuti with further violations of the Travel Act, and count seven alleged that Walsh, BWA and Barbato conspired to commit offenses against the United States in violation of 18 U.S.C. § 371.

Following a jury trial, Walsh was found guilty on counts one through seven, BWA guilty on counts two and seven, Cuti guilty on counts five and six, and Barbato not guilty on count seven.*fn1 The jury also returned a special verdict against Walsh on count one, requiring him to forfeit 55 percent of his interest in BWA pursuant to the forfeiture provision of RICO, 18 U.S.C. § 1963(a) (2). Judge Pratt subsequently ...


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