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United States v. Leto

August 8, 2008

UNITED STATES OF AMERICA, PLAINTIFF,
v.
FRANK LETO AND LOUIS FENZA, DEFENDANTS.



The opinion of the court was delivered by: Arthur D. Spatt United States District Judge

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

Presently before the Court are motions by Frank Leto ("Leto") and Louis Fenza ("Fenza") (collectively, the "Defendants") fora new trial pursuant to Federal Rule of Criminal Procedure ("Fed. R. Crim. P.") 33. The Government opposes the motions.

I. BACKGROUND

A. The Indictment

On August 12, 2003, the Defendants were indicted and charged with seven counts of various racketeering activities that allegedly occurred between 1986 and 2003. In February 2008, the Government moved to amend the indictment. This Court determined that the amendment required action by a grand jury. As a result, the Government obtained a superseding indictment fromthe grand jury.

On February 14, 2008, the Government filed the superseding indictment against the Defendants. The superseding indictment charged the Defendants with

(1) count one- racketeering, in violation of 18 U.S.C. §§1961(1) and 1961(5); (2) count two- racketeering conspiracy, in violation of 18 U.S.C. §1962(d); (3) count three- extortion conspiracy, in violation of 18 U.S.C. §1951(a); and (4) counts four, five and six- three attempted extortions on January 29, 1999, February 11, 1999 and April 1, 1999, in violation of 18 U.S.C. §1951(a).

Pursuant to a motion by the Defendants, this Court dismissed the racketeering act in count one and the attempted extortion charged in count six, related to activities on April 1, 1999.

B. The Grand Jury Testimony

The Grand Jury heard testimony from various witnesses. The testimony from the following three witnesses is relevant to the Defendants' present motions.

1. As To Elliot Hurdy

On March 7, 2001, Elliot Hurdy, the Vice President of the Huntington Townhouse (the "Townhouse"), testified before the grand jury. He testified that he met with Vic Orena, who had ties to organized crime. He met Leto, whose nickname is "Chickie," through Orena and Chris Stefans, owner of the Stefans Florist Shop. Hurdy testified that when he and Rhona Silver took over the Townhouse, Stefans brought Leto to the Townhouse to operate a limousine company. Leto told Hurdy "if you need anything, if anything comes up, if you ever need anything or anybody bothers you, you could just tell them to talk to me."

Hurdy testified that Leto and Fenza were friends and that Fenza was involved with the limousine company and "farmed it out to different people." He further testified that Howard Silver("Howie"), Rhona Silver's brother, mistakenly ordered 20 limousines and incurred a bill of over $20,000. Howard Silver refused to pay the bill and Leto "intervened, and he said to us that he would -- he'll straighten it out. So I was going to pay them." Hurdytestified that Rhona wanted nothing to do with the limousine bill because they were not responsible and Hurdy stated "I thought we would have a problem with these limousine people." In addition, limousine drivers threatened Hurdy and demanded the money they were owed. As a result, Hurdy began giving payments to Leto every week to pay off the debtto the limousine companies. Hurdy testified that he gave Leto the money and Leto kept the limousine people away from him. Hurdy testified that he did not consider the payments to Leto to be "protection money." He looked at it as paying back a debt. However, Hurdyalso stated "You could look at it as protection money."

The Government later asked Hurdy "You knew Chicky had ties to organized crime?" Hurdy responded "Yep." Hurdy further testified that Leto and Fenza actually came to him regarding the limousine debt and asked "What are we going to do about this problem?" In addition, during his testimony, when the Government used the term "protection money" Hurdy stated "I didn't look at it like that." Hurdy could not recall the dates of the payments he made to Leto.

On April 4, 2001, Hurdy was recalled to testify before the grand jury. Hurdy again testified that Leto and Fenza approached him about paying the outstanding limousine debt, after Hurdy had been threatened by the drivers.

Hurdy testified that if he had stopped making payments to Leto and Fenza he believes that someone in his family would have gotten hurt. At that time, the Government asked "you continued making these payments until approximately February of '99?" Hurdy responded "yeah."

Hurdy also testified that the Townhouse utilized the services of a firm called Parking Systems for valet parking. Parking Systems was run by Mark Baron who had a relationship with Leto and Fenza. In fact, Hurdy testified that Leto and Fenza informed him that he could not terminate the relationship with Parking Systems. In addition, he testified regarding a debt owed to Parking Systems and that he believed they owed him money because he had paid above and beyond the amount owed. In this regard, the Government informed Hurdy that a "vig" was an amount of money above what is owed, paid to organized crime. The Government asked whether he was charged with a "vig". Hurdy responded "one hundred percent, yes."

2. As To Greg Fainer

Greg Fainer testified before the grand jury on April 29, 2003. He worked for Center Plate, a company that had previously been called Service America. The company provides catering to large venues and serviced the Townhouse from December 1997 through March 1999. Fainer testified that Hurdy had told him that Leto and Fenza collected money from Hurdy at the Townhouse. In addition when asked whether Leto and Fenza were there to collect money for protection, Fainer responded "Yes." In addition, Fainer testified that Hurdy's payments to Leto and Fenza for protection was common knowledge in the Townhouse.

Fainer also testified that on January 29, 1999 he saw Fenza at the Townhouse and was told by a security guard that Fenza was picking up money. Also, Fainer testified that Leto and Fenza did not pay to attend a New Year's Eve event at the Townhouse and Hurdy was afraid to ask for money from them because he thought they would kill him. Fainer also testified that on February 11, 1999 he and Hurdy were discussing the payments to Leto and Fenza and Hurdy said his father previously paid money to Leto and Fenza.

Following Fainer's testimony, a grand juror asked the Government to follow-up regarding why Fainer was not asked to pay Leto and Fenza protection money. The Government declined to ask Fainer, noting that the question was speculative. The Government did ask Fainer, on follow-up, whether he had personal knowledge of the threats by the Defendants. Fainer responded that he had not been personally threatened by the Defendants and that he had not heard the Defendants make threats. Fainer was also asked what the Defendants would have provided protection from and responded that in the catering business, "there's people coming in, trying to shake down people for money."

3. As To Special Agent Lewicki

On April 8, 2003, Special Agent Robert Lewicki testified before the grand jury. He testified that he had performed surveillance in connection with the investigation of the Defendants. The Assistant United States Attorney stated "I'm going to let Mr. Hurdy's testimony speak for itself and that testimony controls, but can you, to bring the grand jury up to speed here, tell us briefly what, if anything, Mr. Hurdy has told either you or other members of the Government investigating this matter about his relationship with Leto and/or Fenza?" Agent Lewicki then summarized information he obtained through his investigation, as well as information Hurdy testified to before the grand jury. Specifically, Agent Lewicki noted that Hurdy had told him that from June 1997 through March 1999, he made cash payments to Leto and Fenza in exchange for keeping unions and other organized crime families out of the Townhouse.

C. The Pre-Trial Motion to Dismiss the Indictment

On February 20, 2008, the Defendants moved to dismiss the superseding indictment, contending that the Government acted inappropriately and committed misconduct during the grand jury proceedings. Specifically, the Defendants claimed that, during Hurdy's grand jury testimony, the Government improperly led the witness; ignored the witness' actual responses; badgered him; and coerced him.

On February 21, 2008, after reviewing Hurdy's grand jury testimony, the Court denied the Defendants' motion to dismiss the indictment. Specifically, the Court noted "I have reviewed the grand jury minutes. I do not find any coerced testimony sufficient to grant such a motion and that motion is denied."

D. The Trial Testimony

During the trial, the testimony from the following witnesses is particularly relevant to the Defendants' present motions.

1. As to John Carillo

John Carillo, an Investigator with the United States Attorney's Office for the Southern District of New York, informed the jury regarding his background and experience in the investigation of organized crime. He provided a breakdown of the crime families in the New York area and discussed the history of the Colombo Crime Family.

Carillo testified that in the late 1980's, Carmine Persico, the boss of the Colombo crime family was incarcerated and Vic Orena became the acting boss. Orena attempted to splinter off and take power from Persico. As a result, some members of the Colombo family followed Orena and others stayed loyal to Persico. From 1991 to 1993, there was violence within the family, referred to as the Colombo wars. Carmine Persico prevailed and the war ended in 1993. In the late 1990's, the family requested that all members who were loyal to Orena, who had stayed away from the Persico faction of the family, come back into the family. (Tr. at 310-70).

Carillo testified that, after the Colombo war ended, there were a number of people who had been in the Orena faction who did not come back into the family. In addition, as a disciplinary measure, certain members were "shelved" meaning that they no longer had rights within the organized crime structure. Carillo identified both Frank Campione and Frank Leto as members of the Colombo family and stated "I don't know them to have been shelved." In addition, he testified that Leto was taking part in the family after the wars ended, long before 2000. In addition, he stated that Leto is a soldier in the Colombo crime family and became a made member prior to the Colombo wars. (Tr. at 448, 452-53, 489-90, 510).

2. As to Anthony Rotondo

Anthony Rotondo is a cooperating witness under the protection of the Federal government, after pleading guilty to various serious crimes. Rotondo testified that he committed crimes as a member of the mafia, or La Cosa Nostra. He is a member of the DeCavalcante family of New Jersey. (Tr. at 577-82).

In Court, Rotondo identified the Defendant Fenza and stated that "Louis Fenza is an associate of the Colombo family . . . Chickie Leto is sitting down." Rotondo identified Leto as a soldier in the Colombo crime family. He testified that he first met Leto in 1989 and Leto was introduced to him as a member of the Colombo crime family. (Tr. at 595-96, 617-19).

Rotondo further testified that, following the Colombo wars, the Persico faction prevailed and the men who had sided with the Orena faction were absorbed back into the Colombo family within the Persico faction. Indiscussing the Colombo wars, Rotondo also testified that in the late 1990's Leto asked Campione to make peace with the Colombo family. Priorto that time, following the Colombo wars, Leto had gone back into the family, and wanted Campione to make peace as well. (Tr. at 631, 727-28).

Rotondo pleaded guilty to extortion as a racketeering act in connection with the extortion of a firm called Barr Industries. He testified that Barr Industries produced containers used in interstate commerce. In connection with the extortion of Barr Industries, Rotondo met with Frank Melia, Leto and Fenza. Joe Sclafani, a member of Rotondo's crime family, said that Barr Industries was under his protection and Leto said that he was representing a company called Madison Fuel Oil and that Barr Industries owed more than $500,000 to Madison Fuel Oil. Leto said that Madison Fuel Oil belonged to him and that he wanted to see the issue resolved. In addition, at that meeting, Leto introduced Rotondo to Fenza as "my friend Louie." Rotondo testified that the phrase used by Leto meant that Fenza was Leto's associate. In early 1999, there was an additional meeting regarding Barr Industries and Madison Fuel Oil. Rotondo again met with Leto, Fenza and Frank Melia. (Tr. at 634-44).

Rotondo testified that Leto pleaded guilty to the Barr Industries extortion. (Tr. at 769).

3. As to Elliot Hurdy

Elliot Hurdy testified that although he bought the Townhouse with Rhona Silver and Howie Silver, Rhona was named on the paperwork as the legal owner of the Townhouse. Hurdy's title was Vice President. Hurdy testified that the Townhouse was the largest catering facility in the country and had clients from within and outside of New York State. Vendors, including a photographer and a limousine company had offices in the Townhouse. (Tr. at 967-73).

Hurdy testified that in 1997, his friend Stefans asked if the Townhouse needed a limousine company. Stefans brought in Leto to run a limousine business from the Townhouse. Hurdy had met Leto once before at Stefans' florist shop. At that time, Leto was associated with Orena and Hurdy testified that he knew Orena from hisreputation. Hurdy testified that he knew that Orena was involved with the mafia and believed that Leto was also associated with the mafia. In fact, Hurdy testified that at the time Leto came to operate the limousine business at the Townhouse, he believed that Leto was in the mafia. (Tr. at 976-80).

Hurdy testified that Leto said "if anybody bothered me, or if I had any problems with any of the vendors, he'll be more than glad to step in and try to help me." Hurdy believed that he would not have any problems because Leto was involved in organized crime and would be able to take care of whatever Hurdy needed. (Tr. at 982).

Hurdy testified that Fenza ran the day to day operations of the limousine business. At one point Howie Silver organized an event at the Townhouse and arranged for limousines through Fenza. However, Fenza had farmed out some of the car service to other limousine companies who worked for 36 hours straight. As a result, the bill came to $25,000 and Howie refused to pay. Someone from outside the limousine companies began calling Hurdy and demanding money. Finally, someone called and threatened to harm Rhona and Howie. Hurdy testified that he was afraid and did not know who the individual was who made the threat, but that he was afraid. (Tr. at 983, 986-89).

After Hurdy received the threatening telephone call, Fenza came to speak to Hurdy. Fenza said "we'll try to work out the dispute, but we have to pay them." Hurdy felt that the debt was incurred by Howie, but was inherited by Hurdy and the Townhouse. Fenza said that he would step in and moderate to work out a deal so the Townhouse could pay off the debt. As a result, Hurdy started paying Fenza and Leto. Hurdy testified that every time he had some money, he would put cash in an envelope and give it to Fenza or Leto. Hurdy testified that Fenza never directly threatened him, but he was never given receipts or told how much he had left to pay on the debt.

In fact, Hurdy testified that he did not believe that there would ever be an end to the payments. Hurdy felt that he had to pay Fenza and Leto and, depending on the week, paid from $200, $300 or $400 each week or every three weeks. Hurdy felt that if he stopped making payments he would have a problem from the outside limousine company that was owed $25,000. However, Hurdy had no knowledge as to whether Fenza and Leto were actually passing the payments on to that other company. (Tr. at 989-93).

Hurdy also believed that he would have a problem with Leto if he stopped making payments. Specifically, Hurdy stated that Leto "was very imposing and he made a deal and I just had to continue with that deal." Hurdy testified that he was always frightened of Leto and intimidated by Leto, because of his involvement with organized crime; however, he was not afraid of Fenza. In fact, he testified that he had a very good relationship with Fenza. (Tr. at 994-95, 998, 1027).

Hurdy testified that he made payments to Leto and Fenza from approximately 1997 until February or March 1999 and stopped when the FBI began investigating organized crime at the Townhouse. When the FBI began its investigation, Hurdy stopped making payments and told Fenza that it would be best for the limousine company to leave the Townhouse. Hurdy testified that he only asked Fenza to leave because of the presence of the FBI and, otherwise, would not have done so because he was afraid of Leto. (Tr. at 985-98, 1078).

4. As to Special Agent Robert Lewicki

Agent Lewicki testified that throughout the 1990's, Leto was active in the Colombo Crime family and reported to Frank Melia as his captain. He further testified that although there were two factions of the family during the Colombo wars and throughout part of the 1990's, both factions ...


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