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United States v. Sliker

decided: December 13, 1984.

UNITED STATES OF AMERICA, APPELLEE,
v.
JOHN W. SLIKER, JOHN CARBONE, AND THEODORE BUCHWALD, A/K/A "BUCKY," DEFENDANTS-APPELLANTS



Appeal by three defendants from their convictions after a jury trial in the District Court for the Southern District of New York, Thomas P. Griesa, Judge, on 19 counts charging bank embezzlement in violation of 18 U.S.C. § 656, bank larceny in violation of 18 U.S.C. 2113(b), interstate transportation of stolen property in violation of 18 U.S.C. § 2314, falsification of bank records in violation of 18 U.S.C. § 1005, and conspiracy to commit these four offenses in violation of 18 U.S.C. § 371. Affirmed.

Lumbard, Friendly and Pratt, Circuit Judges.

Author: Friendly

FRIENDLY, Circuit Judge:

John W. Sliker, John Carbone and Theodore Buchwald appeal from their convictions in the District Court for the Southern District of New York, after a trial before Judge Griesa and a jury, on nineteen counts of a twenty count indictment, all related to substantially the same transactions. Excluding the third count, which was dismissed upon the Government's motion, three counts charged the defendants with bank embezzlement in violation of 18 U.S.C. § 656, four counts alleged that they committed bank larceny in violation of 18 U.S.C. § 2113 (b), three counts charged them with transporting stolen property in interstate commerce in violation of 18 U.S.C. § 2314, and eight counts alleged that they falsified bank records in violation of 18 U.S.C. § 1005. Finally, there was one count alleging a conspiracy to commit these four offenses in violation of 18 U.S.C. § 371. Both Sliker and Buchwald received concurrent five year sentences on the conspiracy and embezzlement charges and on six of the falsification charges; ten years on each of the larceny and interstate transportation of stolen property charges, also to run concurrently; and five years probation for the remaining two falsification counts after they had served these sentences. Carbone received concurrent five year sentences on each of the first seventeen counts, and five years probation for the final two counts of falsification upon his release from prison. In addition, Carbone was fined $1000 on each of the first ten counts.

The fraud was perpetrated in January, 1981, through the use of checks issued by the "Bahrain Credit Bank" located in Montserrat, West Indies. In fact, the bank was a sham, run from the house of Clive Marks, who would claim to represent the bank and would respond affirmatively to inquiries whether the checks were legitimate. By the time it was discovered that the checks were in fact worthless, they would have been cashed.

The Government submitted evidence to establish the following case: In October or November, 1980, defendant Buchwald and Rocco Saluzzi, an unindicted conspirator who was one of the Government's principal witnesses, traveled together from New York to Brussels and endeavored unsuccessfully to use Bahrain Credit Bank checks for the purchase of diamonds. Shortly after their return, Saluzzi met with defendant Carbone, who had apparently helped to finance Saluzzi's Belgian trip, at Carbone's furniture store. Carbone sought permission to give Saluzzi's telephone number to someone whom Carbone wanted Saluzzi to meet. According to Saluzzi, Carbone explained that "he's a pretty interesting guy; he's a good mover of paper and I thought you might want to meet him." Shortly thereafter, Saluzzi received a call from defendant Sliker, who explained that he had obtained Saluzzi's telephone number from Carbone. The two met and Saluzzi told Sliker of his ability to obtain offshore bank checks which could "take" a telephone call or telex; Sliker responded that he had connections for disposing of such checks and encouraged Saluzzi to obtain them as quickly as possible. At a subsequent meeting in Carbone's store, Sliker told Saluzzi that Sliker could "take care of" the checks at the Merchants Bank. According to Saluzzi, Sliker claimed that he could work with Bill Foster, a vice-president of the bank, who Sliker stated would be "very cooperative" because Foster was in debt to loansharks for approximately $115,000. Saluzzi then met with Buchwald in order to obtain the checks. Buchwald gave Saluzzi two Bahrain Credit Bank checks, one for $48,760 and the other for $51,240; after Sliker disposed of these as described below, Buchwald gave Saluzzi a third such check for $300,000.

On January 5, 1981, Carbone brought Sliker to the Merchants Bank and introduced him to Foster. Carbone told Foster that Sliker was a good friend and a good businessman and would be a good customer of the Bank. Foster opened an account for Sliker, who deposited $300 in cash.

Sliker returned to the Merchants Bank on January 16, 1981, with a Bahrain Credit Bank check payable to himself in the amount of $48,760, and deposited the check into his account. Foster approved the Bahrain Credit Bank check for immediate credit to enable Sliker to cash a $9,000 personal check; Sliker also opened a savings account by transferring $10,000. Sliker then returned to Carbone's store where Saluzzi was waiting to divide the proceeds. Sliker falsely told Saluzzi he had given $900 to Foster, and another $900 was put aside for Buchwald to give to the source of the checks; the remaining $7200 was divided equally among Saluzzi, Sliker and Buchwald, who was waiting outside Carbone's store to collect his share. Saluzzi and Buchwald then left together to pay $900 to the source of the checks.

Three days later, on January 19, 1981, Sliker returned to Merchants Bank and deposited the $51,240 Bahrain Credit Bank check, payable to himself, into his savings account. He then cashed another personal check for $9,000, used a second personal check to purchase a $15,000 Merchants Bank cashier's check payable to an Anthony Filone, and used a third personal check to wire transfer $4,000 to an account at a Maine bank. After these transactions, all but approximately $3000 of the funds from the first Bahrain Credit Bank check had been removed from Sliker's checking account. Sliker then took the $9,000 he had received in cash and replayed the scenario that had followed the deposit of the first Bahrain Credit Bank check: He met Saluzzi at Carbone's store, falsely told Saluzzi that he had paid Foster $900, put aside another $900 for Buchwald to pay to the source of the checks, and divided the remaining $7,200 in equal shares among himself, Saluzzi and Buchwald; Saluzzi and Buchwald once again left together to pay the source of the checks his share.

On the morning of the next day, January 20, 1981, Foster received a telephone call from an individual purporting to be an officer of the Bahrain Credit Bank, who said he was calling from Montserrat at Sliker's request in regard to three checks the Bahrain Credit Bank had issued to Sliker, the two checks already deposited and another $300,000 check. The caller assured Foster that the checks were properly issued and would be paid on presentation through regular bank channels. That afternoon Sliker went to Merchants Bank with the $300,000 check, payable to himself. He deposited this in his checking account, and Foster approved it for immediate credit. Using a personal check, Sliker purchased five Merchants Bank cashier's checks payable to five different payees, totalling $110,200, and a $100,000 Merchants Bank certificate of deposit; he transferred $60,000 from the checking account into his savings account, and directed that a $10,000 Treasury bill be purchased at the next Federal Reserve auction and paid for with funds from his savings account; finally he cashed another $9,000 personal check. These transactions removed all but approximately $20,000 of the $300,000 from Sliker's checking account. The third $9,000 cash payment was handled in the same fashion as the preceding two. On this occasion Sliker also told Saluzzi that he would give Carbone a few hundred dollars for his part in the scheme.

The scheme was premised on Merchants Bank's sending the checks to Montserrat for processing. The sham bank would then stall or claim never to have received the checks, giving the defendants an opportunity to abscond with the proceeds. With the bad luck which fortunately so often attends criminal enterprises, Foster attempted instead to process the three fraudulent checks through the Federal Reserve Bank. On January 21, 1981, Foster learned that the Federal Reserve Bank, which processes only checks drawn on United States banks, had refused to honor the $48,760 and $300,000 checks deposited by Sliker in his checking account as "not payable in the U.S." Foster also learned that the $51,240 Bahrain Credit Bank check, deposited by Sliker into his savings account, had been refused by the Federal Reserve Bank and, in fact, had already been returned to Merchants Bank. Foster called Sliker who promised to take care of the problem by obtaining new checks or a wire transfer. The next morning, Sliker returned to the Merchants Bank, bringing with him two of the cashier's checks he had obtained on January 20, totalling $42,000. Rather than redepositing these into his checking account, Sliker deposited them into his savings account. He asked Foster to return the $51,240 Bahrain Credit Bank check to him, promising to take it back to the people who had given it to him and obtain a new check on a United States bank or a wire transfer. Foster did so, but agreed to return the other two checks to Sliker when these had been returned to the Merchants Bank only after Sliker had covered the remaining overdraft in the checking account. Foster also asked Sliker to stop writing checks on this account until the matter was resolved. Without Foster's knowledge, however, Sliker returned to the bank that same afternoon and cashed a $7,500 check with approval from another officer. Five days later, on January 27, Sliker brought Foster $7,500 in cash for deposit into Sliker's checking account; he told Foster that he had obtained the money by collecting on a debt. Despite Foster's request, Sliker continued to write checks on this account.

Of course, these events made depositing any more Bahrain Credit Bank checks at Merchants Bank impossible. However, Sliker did not inform his co-conspirators of the problem, and, to prevent them from learning of it, he was forced to go through the motions one more time. When he returned from the bank empty-handed, Sliker concocted a story that he had seen FBI agents talking to Foster, and that Foster had waved him off; Saluzzi told this to Buchwald. Soon after these events, Saluzzi left New York and lost touch with Sliker, Buchwald and Carbone. Buchwald, in the meantime, was arrested on January 22 by the FBI on unrelated charges. In his possession were a $50,000 Bahrain Credit Bank "Official Bank Draft" and a slip of paper with "Bill," "Merchants Bank NY," and Foster's telephone number on it.*fn1

Sliker called Foster on January 30, 1981, promising that a $225,000 wire transfer would arrive from Morgan Guaranty Trust Company. No transfer arrived that day, but Foster credited Sliker's account with that amount anyway. When the transfer still had not been made by February 2, after trying unsuccessfully to contact Sliker, Foster went to Carbone's store and spoke with Carbone about the Bahrain Credit Bank checks. Foster described Carbone as "in shock" and as saying, "I told Jack not to fool around in the bank." Foster also testified that Carbone said he would try to get hold of Sliker and would do his best to straighten out the problem. Foster continued to hide the loss by periodically shifting it among various accounts, but told Carbone and Sliker that something had to be done quickly. In the meantime, Foster took steps to reduce the size of the deficit. Using money Sliker obtained from a friend, as well as the principal from the $100,000 certificate of deposit Sliker had purchased on January 20, Foster reduced the overdraft to approximately $80,000.

Early in July, Carbone requested that Foster come by his store to meet someone, who turned out to be Buchwald. Carbone asked Foster to tell Buchwald what had happened. Foster "gave him the whole story," explaining that Sliker had said that the three bank checks were supposed to represent "a gold transaction." Buchwald replied that "Sliker is full of shit." In November, 1981, Foster resigned from the Merchants Bank. Shortly thereafter he visited Carbone at a restaurant owned by Carbone in Pennsylvania. While Foster was there, Sliker telephoned Carbone and Foster spoke with him. Foster asked Sliker to repay the $80,000 still owed the bank; Sliker requested him to destroy the records or "bury it" at the bank.

Buchwald testified in his own defense. He took the position that although he knew the checks were phoney and were being used to perpetrate a fraud, he did not know that they were to be used to defraud a bank. Carbone also testified and also called three other witnesses. He claimed to have had no knowledge of the fraudulent plan until after it had occurred. Sliker rested his case without testifying or calling any witnesses.

Discussion

Appellants have made numerous challenges to their convictions. We shall first discuss issues raised on appeal that are applicable to all of the appellants, and shall then deal with issues raised by and relating to each of them individually.

I. Issues Relating to All Appellants

A. FDIC Insurance

It is an essential element of the fifteen counts of the indictment that were submitted to the jury charging bank embezzlement, bank larceny and falsification of bank records that, at the date of the crimes, the Merchants Bank was insured by the Federal Deposit Insurance Corporation ("FDIC"). See 18 U.S.C. §§ 656, 1005, 2113 (a), (f).*fn2 The only evidence offered by the Government expressly addressed to proving this was the testimony of Richard Urbano, vice president and controller of Merchants Bank, that the bank's deposits "are" FDIC insured. Carbone's counsel moved on behalf of all three defendants at the close of the Government's case for dismissal of the indictment on the ground that the best evidence rule required the Government to produce a certified copy of the insurance policy itself. The judge correctly denied this motion since the proof required was proof of the fact of insurance and not of the contents of a writing, see F.R.E. 1002. Nothing further was said about the issue in the summations. In his charge the judge made plain that one of the elements the Government was required to prove was "that the deposits were insured by the FDIC." The judge stated this twice, moments apart. Between these two statements, he observed that "certain facts are not disputed," among which was that "Merchants Bank undoubtedly has its deposits insured by the Federal Deposit Insurance Corporation." Carbone's counsel objected on the ground that the judge had "failed to instruct the jury that they must find beyond a reasonable doubt that such was in fact the case." After first promising to submit the issue in the form requested, the judge stated the next day that he did not "intend to say anything about the FDIC" and did not do so, doubtless because he discovered that he already had given the charge that Carbone's counsel requested. Appellants argue that there was no evidence of FDIC insurance at the time of the crime.

Nearly five years ago, the Fifth Circuit, citing a plethora of cases in which courts of appeals had been obliged to consider the adequacy of proof of FDIC insured status, observed that the failure of federal prosecutors to prove such status carefully and convincingly in cases where this was an element of the crime was "a nationwide plague infecting United States Attorneys throughout the land" and warned that "we or our sister courts may some day be faced with an insufficiency of the evidence of insurance which . . . would warrant reversal." United States v. Maner, 611 F.2d 107, 111-12 (5th Cir. 1980). In Maner, however, the Fifth Circuit affirmed a conviction where the only evidence of FDIC insurance was a certificate issued 5 years before the offense, and oral testimony by an employee that a 17 year old certificate still hung in the vault, with additional copies posted in public view. The fateful day that had been intimated in Maner apparently arrived in United States v. Platenburg, 657 F.2d 797 (5th Cir. 1981). Evidently finding wisdom in Judge Frank's view that there is only one word that prosecutors truly understand, see United States v. Antonelli Fireworks Co., 155 F.2d 631, 642-46 (2d Cir. 1946) (dissenting opinion), the Fifth Circuit reversed a conviction where the only proof of FDIC insured status was a certificate of insurance that antedated the charged crime by seven years. More recently, but still well before the trial in this case, the Seventh Circuit has twice spoken earnestly on the subject. See United States v. Knop, 701 F.2d 670, 672-73 (1983) (sustaining conviction of crime committed two and a half years before trial on basis of testimony that the bank "is" insured by FDIC); id. at 676-77 (Posner, J., dissenting); United States v. Shively, 715 F.2d 260 (1983) (Posner, J.) (reversing conviction of crime committed in 1978 where only evidence of FDIC insured status was a 1969 insurance certificate), cert. denied, 465 U.S. 1007, 104 S. Ct. 1001, 79 L. Ed. 2d 233 (1984). It is well-nigh incredible that after all this the Department of Justice or, in the absence of action by the Department, a large United States Attorney's office such as that for the Southern District of New York, still has not effectively instructed prosecutors to ask the simple question that would avoid the need for judicial consideration of what should be a non-problem,*fn3 not to mention the risk of reversal of convictions obtained after great effort by the Government, considerable expense to the public and long service by jurors.*fn4

It is elementary that after a conviction the Government is entitled on appeal to all favorable inferences from the evidence. Glasser v. United States, 315 U.S. 60, 80, 86 L. Ed. 680, 62 S. Ct. 457 (1942). Here, the Government can rely on Urbano's testimony viewed in light of the principle that the subsequent existence of a condition is some evidence of its prior existence, at least when the time span is not too great and there is no suggestion of an intervening circumstance that might call its previous existence into question. 2 Wigmore, Evidence, § 437(1) at 513-19 (Chadbourn rev. 1979). We hold, although without enthusiasm, that where, as in this case, the evidence is oral testimony that the bank is insured, and the interval between the crime and the trial is not great, it is reasonable to conclude that "viewed in context, the jury could draw the inference that the bank was insured at the time of the robbery," United States v. Safely, 408 F.2d 603, 605 (4th Cir. 1969), -- in other words, that this jury could take "is" to mean "is and has been." Accord Cook v. United States, 320 F.2d 258, 259 (5th Cir. 1963); United States v. Thompson, 421 F.2d 373, 379 (5th Cir. 1970), vacated on other grounds, 400 U.S. 17, 27 L. Ed. 2d 17, 91 S. Ct. 122 (1970) (per curiam); see also Knop, supra, 701 F.2d at 673.*fn5 As said in Cook v. United States, supra, 320 F.2d at 259-60, while the principle permitting inference of a prior from a subsequent condition "is to be used with caution," "this seems . . . to be an appropriate place for its application" in light of "the common knowledge of the nearly universal prevalence of the banks of the United States having their deposits insured by the Federal Deposit Insurance Corporation. . . ." See also United States v. Phillips, 427 F.2d 1035, 1037 (9th Cir. 1970) (taking judicial notice of fact of FDIC insured status).

Defendants argue alternatively that, even if the evidence of the insured status of the Merchants Bank at the date of the crimes was sufficient, the judge improperly removed the issue from the jury's consideration. The record contradicts this claim. The judge made plain that one of the elements the Government was required to prove beyond a reasonable doubt was that the deposits of the bank were insured by the FDIC.*fn6 Judge Griesa then listed the facts that "are not disputed," the first of which was that Merchants Bank "undoubtedly has its deposits insured" by the FDIC, and proceeded to instruct the jury on what he considered to be the serious issues in the case. There was in fact no dispute that Merchants Bank "has" its deposits insured by the FDIC, which was all that the judge said. Under his charge the jury still was obliged to determine whether the bank had them insured at the date of the crime. Even as to this there was no "dispute" in the ordinary sense of an issue on which opposing evidence or argument has been presented. The trial judge gave the standard instructions that the jurors were the sole judges of the facts and were required to find facts establishing every element of the offenses charged beyond a reasonable doubt. Viewed in the context of the whole jury charge, United States v. Tourine, 428 F.2d 865, 869 (2d Cir. 1970), cert. denied, 400 U.S. 1020, 27 L. Ed. 2d 631, 91 S. Ct. 581 (1971), Judge Griesa's remarks fell well within "the permissible range of the trial judge's discretion to comment upon the evidence," United States v. Lombardi, 550 F.2d 827, 829 (2d Cir. 1977); see generally 1 Weinstein & Berger, Weinstein's Evidence para. 107[07] (1982) [hereinafter cited as Weinstein's Evidence]. We do not think the jury was misled into thinking that it could not render a verdict for the defendants on the basis of a reasonable doubt that Merchants Bank was insured by the FDIC at the time of the crime. See also United States v. Natale, 526 F.2d 1160, 1167-68 (2d Cir. 1975) (judge's statements that there was no dispute as to two elements of the offense not erroneous where judge charged the jury that it had to find facts establishing every element beyond a reasonable doubt), cert. denied, 425 U.S. 950, 96 S. Ct. 1724, 48 L. Ed. 2d 193 (1976).

B. Reasonable doubt

After a page and a half long charge on reasonable doubt to which no objection was made, the court added:

One final word on this subject. Proof beyond a reasonable doubt does not mean proof to a positive certainty or beyond all possible doubt. If that were the rule, few persons, however guilty, would ever be convicted. It is practically impossible for any of us to be absolutely and completely convinced of any controverted fact unless possibly in the realm of mathematics and I guess there you don't have much controversy.

When counsel objected to this, the court invited counsel to submit a corrective charge, which both the Government and defense counsel agreed to do. The next morning, rather than propose a curative instruction, defendants' counsel contended that the erroneous charge was "very difficult" to correct. The Government submitted a corrective instruction, and the judge expressed his willingness to deliver it, but stated that, in light of the full charge and other statements made throughout the trial instructing the jury as to its duties, he thought the additional charge unnecessary. When defendants objected to the Government's proposed charge, the judge decided to leave the matter alone.

Defendants contend that the "few persons, however guilty, would be convicted" charge was "expressly disapproved" in United States v. Ivic, 700 F.2d 51 (2d Cir. 1983). We said in Ivic only that this language is "best avoided," but that any error in that respect may be overcome, as was the case there, by the rest of the charge. Id. at 69. We also expressly recognized the propriety of instructing that "beyond 'reasonable' doubt does not mean beyond all 'possible' doubt." Id. We repeat the observations in Ivic concerning the desirability of adhering to the time-tested reasonable doubt charge found in 1 Devitt & Blackmar, Federal Jury Practice and Instructions § 11.14 (3d ed. 1977) or using the Federal Judicial Center's new model instruction found in Pattern Criminal Jury Instructions No. 21 (1982), in the absence of evidence that the jury is having trouble in understanding the charge. We nevertheless conclude that Judge Griesa's charge, taken as a whole as it must be, Cupp v. Naughten, 414 U.S. 141, 146-47, 38 L. Ed. 2d 368, 94 S. Ct. 396 (1973), "successfully conveyed the substance of the concept" of reasonable doubt. Ivic, supra, 700 F.2d at 69; see also United States v. Magnano, 543 F.2d 431, 436-37 (2d Cir. 1976), cert. denied sub nom. DeLutro v. United States, 429 ...


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