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United States v. Panza

December 18, 1984


Appeal by five defendants from judgments of conviction of racketeering, 18 U.S.C. § 1962(c), racketeering conspiracy, 18 U.S.C. § 1962(d), and mail fraud, 18 U.S.C. § 1341, after a jury trial before Judge Henry Bramwell in the Eastern District of New York, and by defendant Gregory Cappello, who pleaded guilty to one count of mail fraud, from his resulting conviction on the ground that an excessive sentence was imposed. Affirmed.

Author: Mansfield


MANSFIELD and KEARSE, Circuit Judges, and METZNER, District Judge.

MANSFIELD, Circuit Judge:

After a one-month jury trial in the Eastern District of New York before Judge Henry Bramwell on charges of racketeering, 18 U.S.C. § 1962(c), racketeering conspiracy, 18 U.S.C. § 1962(d), and mail fraud, 18 U.S.C. § 1341, five defendants appeal from their following convictions:

(1) Gregory Boutelle and Charles Friscione, racketeering (1 count), racketeering conspiracy (1 count), mail fraud (13 counts]A;

(2) Seymour Ringle, racketeering (1 count), racketeering conspiracy (1 count), mail fraud (10 counts]A;

(3) Christopher Merlino, mail fraud (3 counts]A;

(4) Pasquale Panza, mail fraud (1 count).

A sixth defendant, Gregory Cappello, who pleaded guilty to one count of mail fraud, appeals from his conviction, claiming that the three-year sentence imposed on him was excessive. We affirm.

The case arises out of an elaborate scheme involving many participants to defraud automobile insurance companies in connection with their issuance of accident insurance policies under the "Automobile Insurance Plan" ("AIP") and their payment of claims filed under those policies. Since New York law requires every registered New York automobile to have accident insurance and many drivers cannot obtain the voluntary issuance of such policies because of their bad driving records, age, or places of residence, the state has required all insurance carriers to provide insurance to such drivers through an "Assigned Risk" pool. Under this system each insurer must cover a percentage of these poor risks equal to the percentage of New York State automobile insurance which it voluntarily writes. A separate group entitled the New York State Automobile Insurance Plan ("AIP") has been formed by all automobile insurers involved to administer the system. Normally it assigns to each insurer by random computer selection that company's percentage of applications for assigned risk policies.

The indictment charges that an organized group, of which appellants became members, devised and carried out a mail fraud scheme and racketeering enterprise to defraud certain insurers to whom risks were assigned by AIP. Under the scheme a broker who was a member of the scheme would prepare an application for Assigned Risk insurance coverage for an automobile represented to be in undamaged condition and would bribe a corrupt AIP employee to assign the application by hand to a particular insurance company rather than go through the random assignment computer system. The insured applicant covered by the resulting policy would be either a member of the group or a trusted friend or relative. The insurance company chosen as the target of the fraud would be one whose damage appraiser was a member of the group. Once the policy became effective the broker or some other member of the group would report to the insurer that the insured vehicle had been vandalized or had been involved in an accident in which the insured was clearly liable. The auto would then be appraised at collision shops in Brooklyn or Staten Island that were members of or controlled by the group, using a corrupt appraiser working as a member of the scheme. Like the corrupt AIP employee the appraiser would be paid money for his fraudulent appraisal. The insurer would pay the claim, unaware that it was being victimized and that there had not been any vandalism or collision as claimed.

At trial the government introduced a mass of direct evidence, mainly testimony of participants in the crimes who had pleaded guilty, and of circumstantial evidence, such as insurance company files, in support of the charges. This evidence and the reasonable inferences from it, viewed in the light most favorable to the government, show that over a period of three years (1979-82) approximately 30 people were involved in different aspects of a continuing fraudulent enterprise of the type above described. Most participated for less than the entire period; some were "in and out" of it; and a few took part throughout almost the entire period.

The fraudulent insurance brokers included Stephen Maimin, Jack Weingarten, Jeffrey Cohen, Robert Jarmel, and William Cohen, all of whom testified as government witnesses. The corrupt AIP employees, who hand-processed the applications for insurance policies, were defendants Friscione, Merlino, and Boutelle. The insurance companies principally used for the fraudulent scheme were United States Fidelity and Guaranty Insurance Company ("USF&G"), the Michigan Mutual Insurance Company ("Michigan"), the Boston Old Colony Insurance Company ("BOC"), Transamerica Insurance Company ("Transamerica"), and General Accident Insurance Company ("GA"). The individuals who managed the fraudulent business were Steven D'Ambra, owner of "Andy's Auto Body" shop on Staten Island; Joseph Burruezo (also known as "Joe Savage") employed by Shurco, a company that appraised for USF&G and Michigan; Robert Tarallo, an appraiser for Underwriter's Adjustment Company, which handled all appraisals for BOC; and Anthony Imbesi, owner of the "A to Z Auto Body" shop on Staten Island. In 1980 D'Ambra, Burruezo, Tarallo and Imbesi, all of whom later pleaded guilty to one or more RICO counts, formed their own Staten Island insurance brokerage company, Infinity Brokerage, which prepared AIP applications that were hand-assigned by AIP employee Friscione to specified insurers in order to enable fraudulent claims to be filed, processed and paid.

The automobiles and names used to carry out the scheme were eithEr fictitious or belonged to participants in the scheme or their relatives, business associates or friends who consented to join it for the purpose of providing identity as an owner and claimant. A common vehicle would often be used repeatedly as the instrument for a series of fraudulent AIP insurance applications and damage claims, handled by the same brokers using the same named owners and addresses on different policies issued by different companies. Addresses were either home addresses of the organizers, post office boxes, or addresses of the organizers' friends and relatives, all of whom knew of and were profiting from the frauds. In sum, the evidence revealed a pattern of scores of interrelated fraudulent claims involving use of common vehicles.

The involvement of appellants was supported by testimony of corrupt insurance brokers, corroborated by insurance records, to the effect that money was paid to Friscione, Merlino and Boutelle to hand-assign the Assigned Risk insurance applications involving common vehicles to specific companies, thus enabling fraudulent claims to be filed with one or more of the companies specified: USF&G, BOC, GA or Michigan. Two of the brokers, Maimin and Weingarten, testified that Friscione (who was assistant manager of the eastern region of the AIP) was told that his hand assignments were being obtained to facilitate the filing of fraudulent claims. Against Boutelle there was proof that in return of bribes of money he, at the request of a few of the brokers, hand-assigned hundreds of Assigned Risk applications, which often bore the same names as insureds, though usually with different addresses, to the same few insurance companies. Documents seized from Boutelle contained daily lists of hand-assigned policies, with a record of the insured's name, the date of assignment and the company to whom the corrupt broker requested that the application be assigned. On occasions Boutelle on the same day assigned two applications in the same name to different insurers. In the period from March to May 1982 Boutelle made over 100 such hand-assignments.

The evidence against Merlino was similar to that against Boutelle. Although Merlino hand-assigned only a few applications for Weingarten prior to 1980, in that year the rate and number increased to 30 in the period from March to October, all for one of four companies: USF&G, BOC, GA or Michigan. For hand-assigning each of these applications to a specified company Merlino was paid $30. In July 1980 Weingarten hand-delivered to him an application for a 1979 Cadillac for Doreen Imbesi to be assigned to BOC, even though an application for the same-named insured and same auto had been hand-assigned by Merlino two months previously at Weingarten's request to USF&G. A conversation between Friscione and Weingarten in the summer of 1980, in which Friscione, who was assistant manager of the AIP region in which Merlino was employed, voiced his awareness and approval of Merlino's hand-assignments indicated that Merlino knew of the scheme.

Robert Tarallo, who handled corrupt appraisals of vehicles that were the subject of claims submitted to BOC, recruited defendant Seymour Ringle, who handled automobile damage appraisals for Transamerica, to join the fraudulent scheme. During the period from 1976 to 1979 Tarallo and Ringle had been part of an automobile insurance fraud group headed by Alphonse DiMola, which had operated in much the same fashion as the later scheme charged in the present case. In the earlier scheme Robert Jarmel and Jeff Cohen, brokers employed by Claridge Brokers, filed AIP applications which were routed by Boutelle to specific insurers. Tarallo and Ringle performed the fraudulent appraisals for DiMola. In 1981 and 1982 Jarmel and Cohen filed fraudulent AIP applications for a partially new group, D'Ambra and Tarallo, arranging with Boutelle to have the applications assigned to Transamerica, for which Ringle was the appraiser, with the result that many fraudulent claims were filed under the policies with Transamerica and paid by it after receiving fraudulent appraisals submitted by Rinble. Although these appraisals were represented as ...

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