Accardo Cases

5 of 14 DOCUMENTS

UNITED STATES of America, Plaintiff-Appellant, Cross-Appellee, v. Anthony ACCARDO, et al., Defendants-Appellees, Cross-Appellants

No. 82-5380

UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

749 F.2d 1477; 1985 U.S. App. LEXIS 27465

January 8, 1985

PRIOR HISTORY:

[**1]

Appeals from the United States District Court for the Southern District of Florida.

COUNSEL:

Stanley Marcus, U.S. Attorney; Karen L. Atkinson, Miami, Florida, for Plaintiff-Appellant, Cross-Appellee.

John M. Owens; William D. Hyatt; Martha P. Rogers, U.S. Dept. of Justice, Miami, Florida, for Appellant.

Robert J. Erickson, Washington, District of Columbia, for Plaintiff-Appellant, Cross-Appellee.

Carl Walsh, Chicago, Illinois, for Anthony Accardo.

Edward M. Kay, Fort Lauderdale, Florida, for Appellee.

Leonard A. Sands, Miami, Florida, for Appellee.

Joseph Beeler, Atty. Miami, Florida, for Paul A. DiFranco.

Thomas Foran, Chicago, Illinois, for Appellee.

Wm. P. Cagney, III, Miami, Florida, for Angelo Fosco.

David K. Schmitt; Sam Betar, Chicago, for Paul Fosco.

William T. Laswell, Ft. Lauderdale, Florida, for Appellee.

Alvin E. Entin, North Miami Beach, Forida, for Appellee.

Arnold Kanter; Barry J. Freeman, Chicago, Illinois, for James Pinckard.

Thomas D. Decker, Chicago, Illinois, for James Norton.

Joseph Minceberg, Miami, Florida, for Appellee.

Leonard Steiner, Steiner & Unterman, New York, New York, for Louis Ostrer.

Martin Shacht, North Miami Beach, [**2] Florida, for Appellee.

Edward Calihan, Chicago, Illinois, for Appellee.

E. David Rosen, Rosen & Rosen, Miami, Florida, for Alfred Pilotto.

Barry Fallick, New York, New York, for Bernard Rubin.

Lewis S. Kimler, Deerfield Beach, Florida, for Appellee.

Henry Gonzalez, Tampa, Florida, for Appellee.

Howard Zeidwig, Ft. Lauderdale, Florida, for Appellee.

Anthony Cardinale, Boston, Massachusetts, for Appellee.

Kenneth P. Ross, Chicago, Illinois, for Pinckard.

JUDGES:

Godbold, Chief Judge, Hill, Circuit Judge, and Thornberry, * Senior Circuit Judge. Thornberry, Senior Circuit Judge, sitting by designation, concurring specially.

* Honorable Homer Thornberry, U.S. Circuit Judge for the Fifth Circuit, sitting by designation.

OPINIONBY:

HILL

OPINION:

[*1478] JAMES C. HILL, Circuit Judge.

This appeal requires us to consider the good faith exception to the fourth amendment exclusionary rule, recently established by the Supreme Court in United States v. Leon, 468 U.S. 897, 82 L. Ed. 2d 677, 104 S. Ct. 3405 (1984), and Massachusetts v. Sheppard, 468 U.S 981, 82 L. Ed. 2d 737, 104 S. Ct. 3424 (1984). In light of these 1984 decisions, we vacate the 1982 district court order, [**3] which suppressed evidence seized by officers under a warrant held by the district court to have been insufficiently particular to meet fourth amendment standards, and remand this case to the district court to determine whether those officers acted in good faith.

We briefly summarize the material facts considered by the district court in deciding whether to grant the motion to suppress. Federal agents in Chicago suspected several health care services companies of labor racketeering activities. Their investigation led them to Daniel G. Milano, Jr., a former officer of one of the companies under suspicion, Consultant and Administrators, Inc. (C & A). Milano, whose father was executive vice-president of C & A, told FBI agents that C & A paid labor union officials kickbacks to ensure that all C & A bids for union health services contracts were approved. According to Milano, C & A officials formed two companies, Pinckard and Associates, Inc. (Pinckard), and Fortune Services, to divert revenue from C & A into a kickback fund from which labor leaders were paid. Although Pinckard and Fortune primarily served as conduits for the payoff scheme, the companies also performed the task of [**4] verifying eligibility for coverage under the C & A contracts with the unions. Milano fully described the billing procedures used by Pinkard and Fortune, the manner in which illegal payments were made, and the collection of monthly cash contributions from C & A officers for distribution to union officials.

At the conclusion of this investigation, an FBI agent swore out an affidavit in which he recounted Milano's description of the alleged kickback scheme. The affidavit detailed the completeness of the fraud that permeated the business dealings between the companies involved. Based on that affidavit, a federal magistrate in Chicago issued [*1479] warrants authorizing the search of the administrative offices of C & A and Pinckard. Federal agents conducted such a search and seized several volumes of documents from both companies.

Racketeering charges were then filed in the District Court for the Southern District of Florida against various labor leaders and officers of C & A and Pinckard. n1 Shortly after they were indicted, defendants n2 moved to suppress all materials seized in the C & A and Pinckard searches. The district court conducted a suppression hearing, and, finding [**5] the warrant issued by the Chicago magistrate "unconstitutionally general," suppressed the corporate records seized from the offices of C & A and Pinckard. At the hearing, the district court did not consider whether there was a good faith exception to the fourth amendment exclusionary rule, nor whether the FBI agents had acted in good faith. The United States subsequently brought this interlocutory appeal pursuant to 18 U.S.C. § 3731 (1976), challenging the district court's suppression order on the ground that the officers had acted in good faith. n3 We now vacate and remand.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n1 An independent federal investigation in Miami apparently led authorities there to suspect several of the figures under investigation in Chicago of similar criminal activity in Florida. Indeed, a federal grand jury in Miami issued subpoenas duces tecum to various C & A and Pinckard officers and defendant-appellee Di Franco, requiring them to produce most of the materials seized in the search now under attack. The district court ruled that the documents obtained by the subpoena were not tainted by the illegal searches and denied suppression motions as to that evidence. Whether the materials seized in the challenged search are thus subject to the "independent source" rule, see Segura v. United States, 468 U.S. 796, 104 S. Ct. 3380, 82 L. Ed. 2d 599 (1984), or the "inevitable discovery" doctrine, see United States v. Kroesser, 731 F.2d 1509 (11th Cir.1984), are questions we need not decide.

We also see no reason to consider whether defendants-appellees can invoke the interlocutory appeal provisions of 18 U.S.C. § 3731, see United States v. Moody, 485 F.2d 531, 534 (3d Cir.1973) (allowing cross-appeal), to challenge the district court's refusal to suppress the evidence obtained by subpoena. Since we vacate the order suppressing the records seized in the C & A and Pinckard searches, the order defendants-appellees seek to appeal may be unnecessary to the district court's disposition of the suppression motions. Whether this is the case depends on how the district court resolves the good faith issue on remand. See infra slip op. 1406, . This court therefore will wait for resolution of that issue and not address herein the question involving invocation of the interlocutory appeal provisions of 18 U.S.C § 3731. [**6]

n2 At the time these charges were filed, defendant-appellee Pinckard was president of Pinckard and Associates, Inc.; defendant-appellee Fosco was president of PF Insurance Agency and vice-president of C & A, Inc.; and defendant-appellee Norton was president of C & A, Inc,; and defendant-appellee Di Franco was vice-president of Dental and Vision Care Centers, Inc., a company that allegedly provided kickback monies to receive union health care business. See Supp. Record on Appeal at 1-14.

The district court found that among the twelve named codefendants only Pinckard, Fosco, Norton and Di Franco had standing to challenge the searches. Therefore, they are the only parties to the government's appeal.

n3 The Government did not originally challenge the district court's conclusion that the warrants were impermissibly general, see Stanford v. Texas, 379 U.S. 476, 481-86, 85 S. Ct. 506, 509-12, 13 L. Ed. 2d 431 (1965), instead urging this court to extend our ruling in United States v. Williams, 622 F.2d 830 (5th Cir.1980) (en banc), cert. denied, 449 U.S. 1127, 101 S. Ct. 946, 67 L. Ed. 2d 114 (1981), to encompass the officers' actions in this case. See Brief for Appellant at 13-26.

Shortly before this case was orally argued, however, the government submitted authorities that supported the validity of broad warrants covering searches of businesses permeated with fraud. See, e.g., United States v. Offices Known As 50 State Distributing Co., 708 F.2d 1371 (9th Cir.1983). While we chose to dispose of this appeal as it was briefed by all parties, we note that the affidavit supporting the C & A and Pinckard search warrants alleged that Pinckard was incorporated solely as a conduit for the flow of kickback monies. Thus, at least with respect to Pinckard, the magistrate who issued these warrants might have had reason to authorize the seizure of "all corporate records." See, e.g., United States v. Brien, 617 F.2d 299, 305-09 (1st Cir.) (approving warrant authorizing seizure of materials that made up "most of the business records" of investment firm), cert. denied, 446 U.S. 919, 100 S. Ct. 1854, 64 L. Ed. 2d 273 (1980); see generally United States v. Wuagneux, 683 F.2d 1343, 1348-51 (11th Cir. 1982) (collecting cases on warrants in context of complex, fraudulent business schemes), cert. denied, 464 U.S. 814, 104 S. Ct. 69, 78 L. Ed. 2d 83 (1983).

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**7]

Since the district court issued the suppression order in 1982, the Supreme Court [*1480] has held that there is a good faith exception to the exclusionary rule. In United States v. Leon the Supreme Court considered "whether the Fourth Amendment exclusionary rule should be modified so as not to bar the use in the prosecution's case-in-chief of evidence obtained by officers acting in reasonable reliance on a search warrant issued by a detached and neutral magistrate but ultimately found to be unsupported by probable cause." 104 S. Ct. at 3409. The Court answered that question by taking yet another look at the remedial objectives thought served by the exclusionary rule. Id. at 3413-16. Concluding that the rule remains viable only as a deterrent to police misconduct, the Court held that the costs to the administration of justice of excluding highly probative evidence outweighed any benefits from the rule's deterrent effect where police officers have acted in objectively reasonable reliance on a warrant later found to be defective. Id. at 3419-21. With certain well-defined limitations, n4 the rule announced by the Court required suppression "only if the officers were [**8] dishonest or reckless in preparing their affidavit or could not have harbored an objectively reasonable belief in the existence of probable cause." Id. at 3423. Then, turning to the facts before it, the Court found the officers' reliance on the magistrate's determination of probable cause to be reasonable; the warrant was supported by much more than a "bare bones" affidavit and was not seriously challenged by any of the defendants. Under those circumstances, the Court discerned no reason for applying the "extreme sanction of exclusion." Id. at 3423.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n4 The Court explained three instances where, although the officer has acted in good faith, suppression remains an appropriate remedy:

The exception we recognize today will also not apply in cases where the issuing magistrate wholly abandoned his judicial role in the manner condemned in Lo-Ji Sales, Inc. v. New York, 442 U.S. 319, 99 S. Ct. 2319, 60 L. Ed. 2d 920 (1979); in such circumstances, no reasonably well-trained officer should rely on the warrant. Nor would an officer manifest objective good faith in relying on a warrant based on an affidavit "so lacking in indicia of probable cause as to render official belief in its existence entirely unreasonable." Brown v. Illinois, 422 U.S. [590] at 610-611, 95 S. Ct. [2254] at 2265-2266 [45 L. Ed. 2d 416 (1975)] (POWELL, J., concurring in part); see Illinois v. Gates, supra, 462 U.S. [213] at 246, 103 S. Ct. [2317] at [2336], [76 L. Ed. 2d 527 (1983)] (WHITE, J., concurring in the judgment). Finally, depending on the circumstances of the particular case, a warrant may be so facially deficient -- i.e., in failing to particularize the place to be searched or the things to be seized -- that the executing officers cannot reasonably presume it to be valid. Cf. Massachusetts v. Sheppard, U.S., at , 104 S. Ct., at .

104 S. Ct. at 3422.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**9]

Massachusetts v. Sheppard presented a situation seemingly analogous to the case before this court. In Sheppard the trial judge suppressed evidence seized during the execution of a warrant that failed to describe with particularity the items to be seized. 104 S. Ct. at 3428. The Supreme Judicial Court of Massachusetts refused to recognize a good faith exception to the exclusionary rule and affirmed. The Supreme Court reversed, emphasizing that the officers had evidenced their good faith by submitting an affidavit to a judge, who then drafted a warrant authorizing the search. Id. at 3429. Any error in failing to meet the particularity requirement of the fourth amendment, the Court held, was committed by the judge, not the police officers. Id. Therefore, the officers' conduct was objectively reasonable and well within the bounds of the rule announced in Leon.

On the facts considered by the district court at the suppression hearing, the pending appeal is within the good faith exception articulated in Leon and Sheppard. The agents here "took every step that could reasonably be expected of them." Id. As in Sheppard, the agents submitted a detailed [**10] affidavit to a magistrate in order to secure the search warrants. The affidavit alleged a pervasive fraud that had resulted in the incorporation of a sham business to channel kickback monies to labor officials. In addition, the affidavit was reviewed by several attorneys in the U.S. Attorney's office before it was presented to a magistrate, who found probable cause and issued the warrants. It is not relevant that here, unlike in Sheppard, the magistrate [*1481] did not make changes in the warrant or expressly assure the agents that the warrant was adequate. Since the agents here did not use, and did not know that they used, an improper form, they had no reason to expect the magistrate to make changes in the warrant or to especially assure them of its adequacy.

Moreover, the warrant's authorization to seize "all corporate records" does not transgress the limitation on the good faith exception described by the Supreme Court as cases involving warrants "so facially deficient -- i.e., failing to particularize the place to be searched or the things to be seized -- that the executing officers cannot reasonably presume it to be valid." 104 S. Ct. at 3422. Arguably, "all [**11] corporate records" is significantly more general than the "any controlled substance" language contained in the Sheppard warrant. 104 S. Ct. at 3427 & n. 2. Even so, this is not dispositive. The question here is not the legal validity of the warrant but the reasonableness of the officers' reliance on it. This is not an instance in which "it is plainly evident that a magistrate or judge had no business issuing a warrant," id. at 3429 n. 7 (quoting Illinois v. Gates, 462 U.S. 213 at 264, 103 S. Ct. 2317 at 2345, 76 L. Ed. 2d 527). In addition, the investigating officers were told by a former C & A executive that Pinckard was a sham corporation. Every indication was that C & A officials were extensively involved in the kickback scheme. This type of complex financial fraud, sometimes referred to as the "paper puzzle," has been held to justify a more flexible reading of the fourth amendment particularity requirement. See, e.g., United States v. Wuagneux, 683 F.2d 1343, 1348-50 (11th Cir. 1982) (citing cases), cert. denied, 464 U.S. 814, 104 S. Ct. 69, 78 L. Ed. 2d 83 (1983). n5

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n5 In Wuagneux the court upheld a warrant that in part authorized the seizure of records of "the receipt and disbursement of kickback funds." Waugneux, 683 F.2d at 1350-51. The court emphasized that despite the generality of this description, it was properly construed as referring to a very special detailed kickback scheme in view of the affidavit that accompanied it. Id. This reasoning reinforces the conclusion in the present case.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**12]

On the facts considered by the district court in deciding whether to grant the motion to suppress, the good faith of the officers would be established. However, we are mindful that at the time of the suppression hearing Leon and Sheppard had not been decided, and that the district court did not hold an evidentiary hearing on, nor in any way consider, the issue of the officers' good faith. Although the ultimate question of good faith vel non is a legal issue, which this court may resolve, the ascertainment of the facts upon which to base a determination regarding good faith is for the district judge. In Leon, the Supreme Court said that in determining whether a police officer acted in good faith, "all of the circumstances . . . may be considered." 104 S. Ct. at 3421 n. 23. It is not clear that we have had the opportunity to consider all the circumstances in this case, as no evidentiary hearing was held on the good faith issue. Both parties should be given an opportunity to present evidence touching upon the conduct of the officers. We therefore feel it best to remand the case to the district court, where the parties shall be afforded a hearing on the good faith [**13] issue. The district court, guided by Leon and Sheppard, and this opinion, then may determine whether the officers acted in good faith.

Accordingly, the order of the district court is VACATED and this case is REMANDED for proceedings consistent with this opinion.

CONCURBY:

THORNBERRY

CONCUR:

THORNBERRY, Senior Circuit Judge, sitting by designation, concurring specially:

Since "it is not clear that we have had an opportunity to consider all the circumstances in this case, as no evidentiary hearing was held on the good faith issue," and "we therefore feel it is best to remand the case to the district court, where both parties shall be afforded a hearing on the good faith issue," I concur only in that portion of the court's opinion which supports the decision to remand the case to the district court.

6 of 14 DOCUMENTS

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. ONE RESIDENCE AND ATTACHED GARAGE OF ANTHONY J. ACCARDO DESIGNATED AS 1407 ASHLAND AVENUE, RIVER FOREST, ILLINOIS, AND LOCATED ON THE NORTHEAST CORNER AT INTERSECTION OF ASHLAND AVENUE AND GREENFIELD.; ANTHONY J. ACCARDO, Movant-Appellant.

No. 78-2485

UNITED STATES COURT OF APPEALS, SEVENTH CIRCUIT

603 F.2d 1231; 1979 U.S. App. LEXIS 13559

February 27, 1979, Argued

June 29, 1979, Decided

SUBSEQUENT HISTORY:

[**1]

As Amended July 2, 1979.

PRIOR HISTORY:

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 78 M 310 -- George N. Leighton, Judge.

COUNSEL:

Carl M. Walsh, Chicago, Ill., for movant-appellant.

Charles C. Wehner, Chicago Strike Force, Chicago, Ill., for plaintiff-appellee.

JUDGES:

Before SWYGERT, BAUER and WOOD, Circuit Judges.

OPINIONBY:

BAUER

OPINION:

[*1232]

The issue herein presented is the appealability by movant-appellant of an order denying his "pre-indictment" motion for return of property pursuant to Rule 41(e), Fed.R.Crim.P. n1 Appellant claims the adverse order is final and appealable pursuant to 28 U.S.C. § 1291, whereas the government argues the order is interlocutory and not appealable.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n1. Rule 41(e), Fed.R.Crim.P., provides:

"(e) Motion for Return of Property. A person aggrieved by an unlawful search and seizure may move the district court for the district in which the property was seized for the return of the property on the ground that he is entitled to lawful possession of the property which was illegally seized. The judge shall receive evidence on any issue of fact necessary to the decision of the motion. If the motion is granted the property shall be restored and it shall not be admissible in evidence at any hearing or trial. If a motion for return of property is made or comes on for hearing in the district of trial after an indictment or information is filed, it shall be treated also as a motion to suppress under Rule 12."

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**2]

The facts of this case, insofar as they are defined for purposes of this appeal, are strange but straightforward up to a point. Certain of the facts are apparently uncontested.

Anthony J. Accardo and his wife own, in joint tenancy, a residence in River Forest, Illinois. In January of 1978, Mr. and Mrs. Accardo were vacationing in California. Several people mostly relatives had access to the premises for various purposes. A nonrelative, one Michael Volpe, also had access to the premises; he apparently was employed by Accardo as a handyman. Volpe discovered a forced entry of the Accardo residence in January, 1978, and notified Accardo of that fact. Mr. Accardo immediately returned to River Forest.

It is interesting to note that neither Volpe nor Accardo notified any law enforcement agency, state or federal, about the break-in. As a matter of fact, the record before us is silent as to how the police eventually discovered that a burglary had occurred. The record is also silent as to whether the failure to report the fact to the police was based on a lack of faith in the powers of the police to solve the crime or a basic mistrust of dealing with law enforcement agencies that [**3] has roots in some earlier, and also unexplained, experience of Accardo.

At any rate, some time after the burglary shortly thereafter, as a matter of fact various people described by the government as "known burglars" began showing up dead, none from natural causes, in the Chicago Metropolitan area. n2

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n2. An interesting question arises as to whom a "known burglar" is known. If the government's theory, how ever vaguely expressed, is correct in this case, the occupation of the deceased persons involved must have been known to some large segment of the population. Such a reputation could not have been advantageous and indeed (again, reading investigative assumptions into the hearings) must sometimes be fatal.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

The sudden increase of homicides within a particular, and one might hope, limited professional group, apparently fanned the normally suspicious attitudes of the various law enforcement agencies to a fevered pitch. Eventually, the Federal Bureau of Investigation began to look into the facts and circumstances [**4] herein described.

At some point during the federal investigation certain people were brought before a grand jury to shed some light on the events; these included members of the Accardo family and also Mr. Michael Volpe, [*1233] the handyman. n3 Sometime after Mr. Volpe's appearance before the grand jury and while he was still subject to recall before that body, he left his home for his usual place of employment the Accardo residence and seemingly disappeared from human knowledge.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n3. The records of the grand jury proceedings were submitted for In camera inspection, both to the trial court and this Court to aid the decision of the case.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

This final mysterious touch to the affair led the Department of Justice, acting through a Special Attorney and the Federal Bureau of Investigation, to seek and secure a search warrant for the premises of the Accardos for the purpose of locating

"personal effects including keys, wallet, credit cards, jewelry, clothing and automobile of Michael Joseph Volpe and evidence [**5] of destruction by incineration and secreting of the above items which are evidence of the obstruction of justice by person or persons unknown by endeavoring to secrete, make unavailable, and/or abduct Michael Joseph Volpe, a witness before the Special September 1978 Grand Jury."

The warrant issued and the agents went to the Accardo home. They were admitted by one of the Accardo daughters. After photographing the interior, the agents seized the following items:

1. a Regency police scanner;

2. a memo address pad;

3. a pair of cuff links (taken from a dresser drawer);

4. some debris burnt ashes and "residue" from the incinerator;

5. two Smith and Wesson revolvers (taken from a safe in the basement); and

6. $ 275,000 in cash (found in box also in the safe or vault).

It is these seized items that are the subject matter of the instant appeal. The government states that those items seized, not on the original warrant, were covered by the "plain view" doctrine and were subject to lawful seizure while the agents were engaged in a search pursuant to a lawful search warrant. The government concedes that "(t)here must, of course, [**6] be a nexus . . . between the item(s) to be seized and criminal behavior." Warden v. Hayden, 387 U.S. 294, 307, 87 S. Ct. 1642, 1650, 18 L. Ed. 2d 782 (1967); United States v. Schire, 586 F.2d 15, 19 (7th Cir. 1978).

In DiBella v. United States, 369 U.S. 121, 82 S. Ct. 654, 7 L. Ed. 2d 614 (1962), the Court held a motion for return of property seized by the government can be maintained only if the property is in no way tied to a criminal prosecution In esse against the movant and a denial of such a motion is an appealable order. Meier v. Keller, 521 F.2d 548 (9th Cir. 1975); United States v. Hines, 419 F.2d 173 (10th Cir. 1969). The government also concedes that this standard has been adopted by the various circuits in determining their jurisdiction over appeals from denials of pre-indictment motions for the return of seized property.

Let us see how the government resolves the problem of establishing a "criminal prosecution In esse " and the nexus between the property seized and criminal behavior.

As is admitted, the seizure included some items that are not within the purview of the search warrant. One could easily suggest that the memo pad and the debris might have some reasonable [**7] relationship to "evidence of the obstruction of justice," or other crimes. Even the cuff links might, by stretching the imagination, have some relevance although the explanation for this item seems a bit feeble at best. Assuming the search for Volpe, the missing witness, was the reason for the seizure, one must contemplate the handyman arriving for work wearing French cuffs and gold cuff links.

The police scanner might have a reasonable relationship, according to the testimony at the hearing in the district court, to the death of one of the "known burglars," and the same might be said of the guns that were seized. What does Not appear to be covered by the warrant or by connection to other crimes is the $ 275,000 in cash.

[*1234] Now it is true that keeping that sum in cash in one's home might be considered a casual perhaps even careless approach to money by most people. Even a disinterested observer might be forgiven for believing that Mr. Accardo exhibited the same lack of trust in banks that he exhibited in his attitude toward the police. (It is interesting to note that this sum large for walking-around money even in a wealthy suburb was found After the premises had [**8] been subjected to a burglary. While it is idle to speculate, one would have wished for a proof-of-loss statement after the break-in of January, 1978.) Nevertheless, the seizure of this money must be pursuant to some legitimate police activity.

As nearly as the record shows, the government suggests that the money has evidentiary value because it might "be possible evidence of a motive for the burglary of Mr. Accardo's home." (Testimony of Special Agent Shelton.) Assuming the truth of this statement, it nevertheless affords the government no right to maintain custody of the money. To hold that such a seizure and continued possession is lawful would permit the police to seize and hold property of a burglary victim that had Not been taken by the burglars. The absurd result is that any property not stolen can be seized. The fact is, the property seized was taken from the victim, not the burglar. As a temptation factor, it is not subject to seizure.

The government also suggests that the cash might be evidence of "perjury." Again, if this be true, it certainly is evident that the perjury contemplated is not that of either Mr. or Mrs. Accardo. Their silence is almost deafening. Far [**9] from lying about any event in issue, the Accardos have maintained a total silence on every phase of the matter. From the record in this case, the government would have difficulty maintaining that either of the Accardos could communicate at all. The fact that someone else may have lied about the Accardo cash does not permit the government to seize and hold it.

The government also maintains that the appellant has not met the requirement of maintaining a motion under Rule 41(e) of the Federal Rules of Criminal Procedure in that he failed to show "lawful possession of the seized items." This argument is patently frivolous. Ownership of the premises where the property was seized and the seizure itself from those premises are surely not contested. Under such a showing, and absent a government showing of unlawful possession, the property cannot be withheld. Property of private citizens simply cannot be seized and held in an effort to compel the possessor to "prove lawful possession."

In sum, we are satisfied that the government is engaged in a criminal investigation of various matters growing out of an alleged burglary of the Accardo residence. We also hold that the appellant may [**10] maintain the motion and appeal the denial for the return of property seized under a search warrant, pre-indictment, and the government can successfully resist such a motion by showing that the property seized is tied to a criminal investigation In esse, DiBella, supra, and that there is a nexus between the property seized and criminal behavior, Warden v. Hayden, supra. At least as far as the cash herein seized the government has failed to show any possible connection between it and any alleged criminal act of the appellant. The government cannot, therefore, maintain possession of the money.

On the issue of the appealability and the return of the cash, I am joined by my Brother Swygert; on the issue of the sufficiency of the showing of a criminal investigation In esse and the nexus of the property seized to the investigation, I take comfort and read the approval of my Brother Wood. I agree with both Judges Swygert and Wood that the issue of suppression in the event of an indictment or criminal charge is not disposed of by these proceedings.

Therefore, we reverse the order of the district court denying the motion to return appellant's property as to the $ 275,000 and [*1235] [**11] affirm the ruling as to the remaining articles seized.

Affirmed In Part, Reversed In Part.

DISSENTBY:

SWYGERT(In part)

WOOD, Jr.

DISSENT:

SWYGERT, Circuit Judge, concurring in part and dissenting in part.

I concur in Judge Bauer's opinion on the issues of appealability and the return of the seized $ 275,000 and in that regard write only to offer my analysis of the questions there involved. With regard to the return of the other seized items, however, I find myself in dissent as to the affirmance of that part of the district court's order.

The analysis in cases involving a motion under Fed.R.Crim.P. 41(e) must begin with a determination of whether or not there is a prosecution In esse against the moving party. This determination is required by DiBella v. United States, 369 U.S. 121, 82 S. Ct. 654, 7 L. Ed. 2d 614 (1962), wherein the Supreme Court ruled that a Rule 41(e)-type motion is interlocutory in nature and unappealable if it is tied to a criminal prosecution In esse against the movant. Id. at 131-32, 82 S. Ct. 654.

This court has recently determined that point at which a prosecution comes into being for purposes of a motion for return of property. In Mr. Lucky Messenger Service, [**12] Inc. v. United States, 587 F.2d 15, 16 (7th Cir. 1978), we stated:

The motion for return of property is not one tied to a criminal prosecution in esse against the movant until the criminal process shifts from the investigatory phase to the accusatory. See Shea v. Gabriel, 520 F.2d 879, 882 (1st Cir. 1975). In the present case, no charges have been filed and thus the criminal process, if still alive, is at best in the investigatory stage. Accordingly, the district court's order is a final appealable order.

Admittedly, that case involved not a Rule 41(e) motion but a motion seeking the return of seized property which invoked the court's general equitable jurisdiction. Inasmuch as this court in Mr. Lucky defined a prosecution In esse with direct reference to the DiBella rule, Id., I believe the Mr. Lucky definition should be applied to Rule 41(e) motions. Accordingly, because no criminal charges have yet been filed in the instant case, there is no prosecution In esse; the criminal process is at best in the investigatory stage. Id. The DiBella opinion itself supports this determination. The Court there required that an order on a suppression motion be treated as part [**13] of a prosecution In esse "(w)hen at the time of (the) ruling there is outstanding a complaint, or a detention or release on bail following arrest, or an arraignment, information, or indictment." 369 U.S. at 131, 82 S. Ct. at 660. In the instant case, no such accusatory event has taken place.

Once it has been determined that the Rule 41(e) motion is appealable, the merits of that appeal must be addressed. I concur with Judge Bauer's outcome regarding the return of the seized money, but I believe an affirmance of the district court's denial of the return of the other seized items is premature.

Rule 41(e) provides that a person aggrieved by an illegal search and seizure may move for the return of illegally seized property. In order to decide the merits of such a motion, the court must pass on the legality of the search and seizure. As Judge Bauer indicates in his opinion, not all of the items seized in the search of the Accardo home were named in the search warrant. Thus, some exception to the general warrant requirement must be present to validate the seizure of these items.

The Government contends that the items seized but not listed in the warrant are covered by the "plain view" [**14] doctrine, which allows warrantless seizure of certain items found in plain view. These items include instrumentalities of crime, fruits of crime, contraband, or even "mere evidence" of crime for which there is probable cause to believe that the evidence will aid in a particular apprehension or conviction. See Warden v. Hayden, 387 U.S. 294, 307, 87 S. Ct. 1642, 18 L. Ed. 2d 782 (1967). I agree with Judge Bauer that the Government has failed to show a sufficient nexus between the property seized and criminal behavior in the case of the money, and that therefore [*1236] the money must be returned regardless of the validity of the search.

As to the other items seized but not listed in the warrant, the Government presents at least a colorable showing of sufficient nexus for each item. Assuming, Arguendo, the existence of this nexus, the seizure of these items may yet be invalidated if the search warrant is invalid. This is because the plain view doctrine by which the Government seeks to justify these seizures requires that the agent must have been lawfully at the vantage point from which he gained his plain view. n1 Thus, if the underlying search warrant is invalid, the agents [**15] would not lawfully have been in the residence, and even the plain view of items which they obtained from their unlawful vantage point would be insufficient to validate the seizures.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n1. "The primary requisite necessary for the application of the plain view doctrine is that the officer has a right to be where he is when he observes the evidence in plain view." United States v. Cooks, 493 F.2d 668, 670 (7th Cir. 1974), Cert. denied, 420 U.S. 996, 95 S. Ct. 1437, 43 L. Ed. 2d 679 (1975).

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

In the instant case, movant has indeed challenged the validity of the search warrant, but his challenge in this regard has been hampered by the fact that the Government affidavit which supports the search warrant and purportedly supplies the requisite probable cause has been ordered impounded because reference is made in the affidavit to grand jury testimony. The affiant was able to refer to this testimony because portions of it were ordered released for this purpose by the court pursuant to a Fed.R.Crim.P. 6(e) n2 motion made [**16] by the Government.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n2. Fed.R.Crim.P. 6(e)(2)(A) provides:

(A) Disclosure otherwise prohibited by this rule of matters occurring before the grand jury, other than its deliberations and the vote of any grand juror, may be made to

(i) an attorney for the government for use in the performance of such attorney's duty; and

(ii) such government personnel as are deemed necessary by an attorney for the government to assist an attorney for the government in the performance of such attorney's duty to enforce Federal criminal law.

I note also the provisions of subpart C of Rule 6(e)(2):

(i) when so directed by a court preliminarily to or in connection with a judicial proceeding: or

(ii) when permitted by a court at the request of the defendant, upon a showing that grounds may exist for a motion to dismiss the indictment because of matters occurring before the grand jury.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

In the process of deciding the instant [**17] case, the district court reviewed the impounded affidavit In camera and ruled that probable cause had been established thereby for the warrant's issuance. The court denied movant's motions to be allowed to examine the affidavit.

The Government concedes that movant would be entitled to review the affidavit in order to seek suppression of the seized items in the event of an indictment, but relies on Shea v. Gabriel, 520 F.2d 879 (1st Cir. 1975), in arguing that the affidavit need not be released to movant at this stage of its investigation. In Shea the court indicated that pre-indictment release should be denied, but it based this view on the fact that the district court in that case had thoroughly analyzed all of the competing factors involved:

First, the district court carefully balanced the government's interest in secrecy to protect its on-going investigation against the temporary loss to Shea of the property here at issue. We are not inclined to disturb the balance struck, at least absent any reason to believe that the cloak of secrecy is being abused by the government. Second, the judge below did entertain the appellant's complaint to the extent he could within the confines [**18] of the secrecy requirement. He examined the affidavit In camera and determined that it was at least Prima facie support for a finding of probable cause. Third, the dismissal was without prejudice to reasserting the claim if the government's delay in either prosecuting or taking other dispositive action reaches unreasonable propor<<PCITE, [*1237] tions. . . . Lastly, appellant made no effort to show that he is entitled to lawful possession of the seized items.

520 F.2d at 882.

In the case at bar, I am not convinced that the district court adequately considered all of these factors. Accordingly, I believe an affirmance of this part of the court's order is premature, and I would remand for a more thorough analysis. Moreover, I would make it clear that the district court's finding, based on its In camera inspection of the affidavit, that "the facts set forth therein sufficiently establish probable cause for issuance of (the) search warrant," is merely preliminary in nature. It does not foreclose a complete, De novo review of the issue either if movant is indicted or if the Government's delay in prosecuting or otherwise disposing of the action reaches unreasonable proportions. [**19] See Shea v. Gabriel, 520 F.2d at 882. n3

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n3. I would not attempt inflexibly to define "unreasonable proportions" in advance, but would instead merely note that in Mr. Lucky, this court stated that

if no charges are filed for nearly one and one-half years after the property was seized, and the Government is unable to present evidence justifying such a delay, constitutional violations emerge which would seem on equitable principles to mandate that the property be returned.

587 F.2d at 17.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

Thus, I join Judge Bauer in reversing the district court's denial of the Rule 41(e) motion as to the return of the seized money. I would, however, vacate the court's order as to the return of the other unlisted, seized items, remanding that portion of the case for further consideration in accordance with the views set forth in this opinion.

HARLINGTON WOOD, Jr., Circuit Judge, dissenting.

I regret I cannot join in Judge Bauer's classic opinion as I have reservations about the appealability of the order.

The grand jury [**20] investigation, the government explains, involves possible violations of the federal racketeering n1 and obstruction of justice statutes. n2 The government further states that appellant is the principal suspect and target of the grand jury investigation, and has been so advised.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n1. 18 U.S.C. § § 1961-1968.

n2. 18 U.S.C. § § 1503, 1510.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

Four days after execution of the search warrant appellant filed two related motions. The motion for Return of Property pursuant to Rule 41(e), Fed.R.Crim.P., is captioned in the search warrant proceedings. In support of that motion it is alleged that the seizure was illegal and that appellant was in lawful possession of the property seized. The other motion was titled Motion to Enjoin Government. The thrust of that motion was to restrain the government from making any use of the seized property and to have all the seized items deposited with the clerk pending disposition by the court of the Rule 41(e) motion. The motions were denied.

Both parties rely to some extent on [**21] DiBella v. United States, 369 U.S. 121, 82 S. Ct. 654, 7 L. Ed. 2d 614 (1962), to support their positions on appealability. In each of the two consolidated cases considered in DiBella, the defendant had been arrested before the motion was filed under the prior but similar Rule 41(e) for the return of property and its suppression as evidence, and each defendant was indicted before the motion was decided. Even though the factual backgrounds in DiBella may therefore be distinguished from appellant's status since he has not to date been charged with an offense growing out of the grand jury investigation, I believe we must look to DiBella for guidance and follow its rationale so far as it may be applicable to appellant's situation. The DiBella court in holding the orders non-appealable explained:

An order granting or denying a pre-indictment motion to suppress does not fall within any class of independent proceedings otherwise recognized by this Court, and there is every practical reason for denying it such recognition. To regard such a disjointed ruling on the admissibility of a potential item of evidence in a [*1238] forthcoming trial as the termination of an independent [**22] proceeding, with full panoply of appeal and attendant stay, entails serious disruption to the conduct of a criminal trial. The fortuity of a pre-indictment motion may make of appeal an instrument of harassment, jeopardizing by delay the availability of other essential evidence. . . . Furthermore, as cases in the Second Circuit make clear, appellate intervention makes for truncated presentation of the issue of admissibility, because the legality of the search too often cannot truly be determined until the evidence at the trial has brought all circumstances to light.

369 U.S. at 129, 82 S. Ct. at 659 (citations omitted).

We hold, accordingly, that the mere circumstance of a pre-indictment motion does not transmute the ensuing evidentiary ruling into an independent proceeding begetting finality even for purposes of appealability. Presentations before a United States Commissioner . . . as well as before a grand jury . . . are parts of the federal prosecutorial system leading to a criminal trial. Orders granting or denying suppression in the wake of such proceedings are truly interlocutory, for the criminal trial is then fairly in train. When at the time of ruling there [**23] is outstanding a complaint, or a detention or release on bail following arrest, or an arraignment, information, or indictment in each such case the order on a suppression motion must be treated as "but a step in the criminal case preliminary to the trial thereof." . . . Only if the motion is solely for return of property and is in no way tied to a criminal prosecution in esse against the movant can the proceedings be regarded as independent.

Id. at 131-32, 82 S. Ct. at 660 (citations omitted, emphasis added). The courts have found the test in the last sentence above. The denial of a preindictment motion is an interlocutory, non-appealable order unless "the motion is solely for return of property and is in no way tied to a criminal prosecution In esse against the movant." Meier v. Keller, 521 F.2d 548, 556 (9th Cir. 1975); United States v. Hines, 419 F.2d 173, 175 (10th Cir. 1969). Under that rule had the appellant been the subject of a complaint or indictment at the time the motion was filed, possibly even at the time the order was entered, n3 the order would clearly have been non-appealable, but that is not this case.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n3. As to the effect on appealability of a subsequent prosecution development, See Shea v. Gabriel, 520 F.2d 879, 881 (1st Cir. 1975); Parrish v. United States, 376 F.2d 601, 603 (4th Cir. 1967).

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**24]

Nonetheless, I cannot regard the appellant's Rule 41(e) motion as "solely" for the return of property. His motion may be clearly distinguished from the proceeding we recently considered in Mr. Lucky Messenger Service, Inc. v. United States, 587 F.2d 15 (7th Cir. 1978). In Lucky Messenger the plaintiff filed not a Rule 41(e) motion, but a new independent civil action seeking through the exercise of the court's general equitable jurisdiction only the return of money seized pursuant to a search warrant, not the suppression of evidence. The appellant does not specifically ask in his 41(e) motion that the property be suppressed as evidence. He need not bother as Rule 41(e) clearly takes care of that for him. Rule 41(e) provides by its own terms that the granting of the motion automatically precludes admissibility. United States v. The Merchant Diamond Group, Inc., 565 F.2d 252, 253 (2d Cir. 1977). Not only would the allowance of the motion restore the property and suppress its use as evidence, it would also extend to the fruits of the search. Evidence discovered through any related leads would also thereby become inadmissible at any hearing or trial in all courts forever. I do not [**25] see that the automatic suppression effect of the motion is affected by the stage of the criminal proceeding at which the seizure is challenged. I am not aware of any offer by appellant to waive the suppression provision of Rule 41(e) even assuming the waiver [*1239] might be effective. I am, however, aware that the failure of Rule 41(e) to discriminate between the return of seized property and its suppression has been criticized, United States v. Wilson, 176 U.S.App.D.C. 321, 324, 540 F.2d 1100, 1103 (1976), or separated into two parts, Shea v. Gabriel, 520 F.2d 879, 881 (1st Cir. 1975), or transformed into something different, Richey v. Smith, 515 F.2d 1239, 1245 (5th Cir. 1975), but regardless of whatever criticisms the present rule may deserve, I do not believe it is the responsibility of this court to rewrite it.

Another circumstance is that the appellant filed with his Rule 41(e) motion another motion directly related to the first motion which sought to require that the property be deposited with the clerk of the court, and the government be enjoined from using the seized property in any manner whatsoever pending the court's determination of the Rule 41(e) motion. The [**26] appellant thereby sought the suppression of the property as evidence even in advance of the suppression which would follow by the allowance of the 41(e) motion. Appellant argues that the government is attempting to recast this appeal of the denial of a motion for the return of property into a motion to suppress. I believe the goal of the appellant is clear. It is to obtain the fringe benefit of suppression, perhaps even more than the mere return of the money. The motion made no special issue of the money. The first prong of the DiBella appeal exception of being "solely" for the return of property is therefore not satisfied. In the majority opinion I find no consideration or mention made of the DiBella use of "solely" or of the resulting suppression of evidence.

Appellant filed his motions almost immediately after the execution of the search warrant at a time when the grand jury investigation of him was just getting under way. The government satisfied the district judge about the relevancy of the property seized. I would not require at this stage of the proceedings that the government disrupt and delay the grand jury process in order to lay bare its investigation in a mini-trial [**27] for the benefit of appellant's motion. That procedure could possibly jeopardize the whole investigation. Appeal at this time unnecessarily prolongs the grand jury disruption. I do not see it on balance to be necessary nor in the public's interest. The relevance of the money, it is true, is not clear to us at this stage of the proceedings, but I am neither the United States Attorney nor a member of the grand jury and am therefore not privy to their information and theories. That being so, I am hesitant to adopt the majority's characterization of the government's seizure of the money merely as the seizure from a victim of what the burglars may have overlooked. The appellant should not be viewed just as the victim of a local crime, but as the target of an active federal investigation into major crimes. It is clear that the federal government's interest in this case is not in the mere solving of a house robbery. That is purely a local matter. Possible violations of the federal racketeering and obstruction of justice statutes, however, are of great public importance. I see no need * MESSAGE(S) *MORE SECTIONS FOLLOW at this time for the government to tell us all about it. It should [**28] not be required to choose between justifying its investigation step by step and, failing that, suffering on appeal the suppression of the seized evidence, rendering it forever immune from law enforcement use. There is a better time for all of that if and when it becomes necessary. The life of the special grand jury is controlled by statute under the court's direction. n4 It does not enjoy eternal life. After any failure to return an indictment there would no longer be a suppression issue nor a pending criminal proceeding. At that time an adverse order would clearly be appealable. It cannot be said at this time, however, that no indictment will be forthcoming in the near future, or would have been forthcoming but for the suppression of the evidence resulting from the decision of this court.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n4. 18 U.S.C. § § 3331-3333.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

[*1240] Appellant would not be left, however, without a remedy. If we were to dismiss this appeal, he could still file a Lucky Messenger type independent civil action for the return of [**29] the property. That avenue of relief, if meritorious, would not serve to suppress the property as evidence. Appellant's Rule 41(e) motion cannot be converted into a motion seeking equitable relief, because it alleges, for instance, no callous disregard for the constitutional rights of appellant nor any irreparable injury to him resulting from not having present possession of the money. Richey v. Smith, 515 F.2d 1239, 1243 (5th Cir. 1975). Appellant may also have a partial remedy in a separate cause of action for damages against the agents alleged to have conducted the unlawful search. Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388, 91 S. Ct. 1999, 29 L. Ed. 2d 619 (1971).

I would dismiss the appeal, but without prejudice to appellant to raise the same issue at a later time if the issue is not resolved in the meantime.

7 of 14 DOCUMENTS

UNITED STATES of America, Plaintiff-Appellee, v. Anthony Joseph ACCARDO, Defendant-Appellant

No. 13257

UNITED STATES COURT OF APPEALS SEVENTH CIRCUIT

298 F.2d 133; 1962 U.S. App. LEXIS 6301; 62-1 U.S. Tax Cas. (CCH) P9170; 9 A.F.T.R.2d (RIA) 352

January 5, 1962

COUNSEL:

Maurice J. Walsh, Stanford Clinton, Chicago, Ill., for appellant.

T. George Gilinsky, Criminal Division, Department of Justice, Washington, D.C., James P. O'Brien, U.S. Atty., Chicago, Ill., Herbert J. Miller, Jr., Asst. Atty. Gen., Robert S. Erdahl, Beatrice Rosenberg, Attorneys, Department of Justice, Washington, D.C., for appellee.

JUDGES:

Before DUFFY, SCHNACKENBERG, and KILEY, Circuit Judges.

OPINIONBY:

KILEY

OPINION:

[*134]

This is an appeal by defendant from a judgment, upon a verdict, convicting him, after a trial of nearly nine weeks, on three counts charging violations of § 7206(1) n1 of the Internal [**2] Revenue Code of 1954. He was sentenced to a total of six years in prison and fined $ 15,000.00.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n1. ' § 7206. Fraud and false statements. Any person who -- (1) * * * Willfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter; shall be guilty of a felony and, union conviction thereof, shall be fined not more than $ 5,000, or imprisoned not more than 3 years, or both, together with the costs of prosecution.'

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

Defendant, before 1956, reported income from gambling and undisclosed sources. In February, 1954, the District Director of Internal Revenue wrote him ordering him to maintain detailed records 'from that time forward.' On October 5, 1955, the Director wrote asking him to submit records to support income and deductions reported in his 1954 return. His attorney told the Director there were no records.

In 1956 [**3] defendant reported income of $ 42,862.25 from Premium Beer Sales, Inc. In an 'addenda' he scheduled 'expenses incurred in promoting beer sales and automobile expenses' to support a deduction of $ 515.51. In 1957 he reported income from Premium of $ 67,540.85 and claimed deductions of $ 1,726.76 for automobile expense as 'agent' for Premium. In 1958 he reported income from Premium of $ 68,871.70 and claimed automobile expense deduction of $ 1,753.66 as 'agent' for Premium. April 25, 1960, the January Special Grand Jury indicted him.

The indictment is in three counts, n2 each charging substantially the same violations in 1956, 1957, and 1958. In essence, it is charged that defendant stated in his income tax returns that he was employed by Premium and falsely stated that 80% of his automobile expenses were incurred by him in promoting beer sales in 1956, and 90% of that expense as 'agent' for Premium in 1957 and 1958.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n2. Count I charges that defendant

'* * * on or about March 20, 1957 * * * did unlawfully, wilfully and knowingly make, and subscribe a document, which contained a written declaration * * * which said defendant did not believe to be true and correct * * * that * * * Accardo * * * about March 20, 1957 made, subscribed, and filed * * * a document, to-wit, 1956 U.S. Individual Income Tax Return * * * in which * * * defendant stated in substance, that during the tax year 1956 he was employed by Premium Beer Sales * * * and paid the sum of $ 42,862.25, * * * that while so employed 80 percent of the automobile expenses involved in the operation of a certain Mercedes Benz automobile were incurred by him in promoting beer sales for * * * Premium * * * whereas * * * defendant then and there well knew that this statement was not true and correct in that 80 percent of the said automobile expenses were not incurred by him in promoting beer sales for Premium * * * in violation of Section 7206(1), * * *'.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**4]

Defendant's motion to dismiss the indictment was denied. We see no merit in his claim that this was error. The several counts are substantially in the words of § 7206(1) and are sufficnet, United States v. Foster, 7 Cir., 253 F.2d 457, 459 (1958), to tell defendant what the charges against him were, and are not duplicitous. The charges of falsehood are sufficiently broad to include [*135] charges that he did not use the automobile at all in 'promoting beer sales' or as 'agent' for Premium. Finally, the Special Assistants and the Special Grand Jury do not, in themselves, indicate a 'crash' enforcement program criticized in United States v. Bufalino, 2 Cir., 285 F.2d 408, 419 (1960) (concurring opinion).

The next question is whether there was substantial evidence to support the verdict. The Government's theory of proof was that though defendant stated he was employed as a promoter of beer sales or as agent for premium, he did nothing to warrant the statements and that consequently he could not have used his automobile in the way he swore that he had in the return.

The Government introduced the following evidence: Although defendant had an employment [**5] contract with Premium, the latter was reimbursed by Fox Head Brewery for the contract payments to defendant. Defendant was unknown and unseen at Premium's office at any time by Premium's office supervisor of salesmen; by Fox Head salesman whose desk was at Premium and whose 'contacts' were with the latter's salesmen; by Premium's bookkeeper who saw the salesmen each day; by six Premium salesmen who attended salesmen's meetings; and by two salesmen-drivers and eight Premium sub-distributors. No president of Fox Head after November 1956 nor those in charge of its production, sales or fiscal affairs had ever seen defendant. Its Illinois division manager had never seen him. There were no reports in Premium's records of sales promotion or sales by defendant. He was paid more than either the owner or president of Premium.

Viewed in the aspect most favorable to the Government, this evidence and reasonable inferences drawable from it give substantial support to the verdict. Neubauer v. United States, 8 Cir., 250 F.2d 838, 839 (1958). Testimony that defendant rendered no service, 'did nothing' and had never 'done anything' was inadmissible as invading the province of the [**6] jury.

Defendant contends the court erred in denying various motions, for mistrial and to poll the jury, based upon prejudicial newspaper publicity.

The selection of the jury began September 12, 1960. The court directed and ordered the jurors, at the end of the first day of voir dire, not to read the daily press or listen to television or radio accounts in connection with the case. That afternoon and evening, and the next morning, newspapers reported that defendant had been arrested fourteen times with 'no major conviction'; that he had been found guilty of disorderly conduct; that in 1930 he was indicted for carrying concealed weapons; that in 1948 he was charged with conspiracy to defraud the Government as a result of a trip under an assumed name to visit 'syndicate hoodlums' at Leavenworth. 'He beat both charges * * *.'

The morning of September 14 there was a newspaper headline: 'THERE'S A CAPONE ECHO AT ACCARDO TRIAL.' The article compared defendant's trial with that of 'Al Capone' twenty-nine years before, and said 'In the villain's part this time was Chicago's jet-age Capone -- stony-faced * * * Accardo, the master of muscling legitimate business.' The article said the [**7] evidence that convicted Capone was 'practically negligible.'

On September 27 Joseph Bronge, Jr., a Government witness, testified that Accardo worked for his father as a distributor of Fox Head beer, that he knew Accardo, had visited his home; that his father was now dead; and that he had heard defendant was engaged in the sale of beer.

The next morning there were front page headlines: 'MURDER VICTIM'S SON TAKES STAND AGAINST ACCARDO' and 'GANGSTER UPSET BY TESTIMONY OF BRONGE.' On page 14 appeared the headline: 'ACCARDO JURY HEARS SON OF GANG VICTIM.' The stories related that the father [*136] of the witness appeared before the grand jury which indicted Accardo, had been indicted for perjury, and was murdered 'in a West Side beer war last year'; that 'the shooting was blamed on fear by hoodlums that he would tell how they forced him and other beer distributors to put them on the payroll.'

The jury separated each night and was exposed to the prejudicial publicity. In view of that fact and of defendant's publicity value, it was essential that the judge frequently, prior to separation, call the attention of the jurors specifically to the possibility of newspaper accounts carrying [**8] statements of facts about the case. Coppedge v. United States, D.C.Cir., 272 F.2d 504, 507 (1959).

The judge's general admonitions at the beginning of the jury selection, his assumption of their effectiveness, and his instructions, were inadequate protection. His general inquiry during the voir dire examination n3 did not supply the deficiency. There is no certainty that all jurors would volunteer information about violating the admonitions or admit that they were influenced by the publicity. Coppedge v. United States D.C.Cir., 272 F.2d 504, 508 (1959). He should have, by the careful examination of each juror, out of the presence of the others, determined the effect of the articles on those who had read them and whether they had discussed the articles with others. Coppedge v. United States D.C. Cir., 272 F.2d 504, 508 (1959). These individual interviews would have tended to overcome reluctance to speak out.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n3. 'I ask each and every one of you, have you followed my direction in that regard?'

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**9]

The published material would have been inadmissible in evidence because it would prejudice defendant. Its effect would be at least as great if it reached the jury through news accounts. Marshall v. United States, 360 U.S. 310, 312-313, 79 S.Ct. 1171, 3 L.Ed.2d 1250 (1959).

Each case must rest on its 'special facts.' Marshall v. United States, 360 U.S. 310, 79 S.Ct. 1171, 3 L.Ed.2d 1250 (1959); United States v. Shaffer, 7 Cir., 291 F.2d 689 (1961)Cert. denied, 82 S.Ct. 192 (nov. 14, 1961). In the instant case there was no careful examination of the individual jurors nor offer to defendant of unlimited peremptory challenges, as there were in the Shaffer case. And the instant case cannot be distinguished from Marshall v. United States, as Shaffer was distinguished from Marshall by this court, on the ground that in Marshall the prejudicial articles were read during the trial with no opportunity to secure other jurors. The Bronge incident was during the trial, as in Marshall.

The motions for mistrial during voir dire and later, and the motion to poll the jury after the Bronge incident, were addressed to the court's discretion. [**10] Marshall v. United States, 360 U.S. 310, 79 S.Ct. 1171, 3 L.Ed.2d 1250 (1959); United States v. Shaffer, 7 Cir., 291 F.2d 689 (1961), cert. denied, 82 S.Ct. 192 (Nov. 14, 1961). Under the 'special facts' of this case, however, we conclude that the rulings failed to provide adquate precautionary measures in aid of defendant's right to a fair trial.

There was prejudicial error also in the trial court's admission, over objection, of evidence of defendant's income tax returns for the years 1940 through 1955. The court admitted the evidence to show 'motive, intent or willful conduct.'

No case has been cited, or found, which would support the instant rulig. Government relies upon United States v. Iacullo, 7 Cir., 226 F.2d 788 (1955), cert. denied 350 U.S. 966, 76 S.Ct. 435, 100 L.Ed. 839 (1956). That case is not applicable because there evidence of a prior similar violation was held admissible under an exception to the general rule, n4 the [*137] earlier transaction was 'in remarkable conformity' to the pattern of the offenses charged, and there was not a jury. Here there was a jury; and most of the disputed [**11] evidence, indicating violations of Illinois anti-gambling laws, n5 showed no 'remarkable conformity' to the offenses charged in the instant indictment, since it has never been claimed that the prior returns violated the law.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n4. 'As a general rule, upon the trial of an accused person, evidence of another offense, wholly independent of the one charged, is inadmissible.' 226 F.2d 788, 793.

n5. See IllRev.Stat. ch. 38 § § 324-327, 336, 341-343 (1959).

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

The Supreme Court has said taht it would 'expect willfulness' in felonies of this class n6 'to include some element of evil motive and want of justification * * *.' Spies v. United States, 317 U.S. 492, 498, 63 S.Ct. 364, 368, 87 L.Ed. 418 (1943). The Court there equated 'bad faith' and 'evil motive.' Morissette v. United States, 342 U.S. 246, 265, 72 S.Ct. 240, 96 L.Ed. 288 (1952). And in United States v. Murdock, 290 U.S. 389, 394, 54 S.Ct. 223, 225, 78 L.Ed. 381 (1933) the Court said that in a criminal [**12] statute willful generally means 'an act done with a bad purpose * * *; without justifiable excuse * * *; stubbornly, obstinately, perversely * * *. * * * also * * * to characterize a thing done without ground for believing it is lawful * * * or conduct marked by careless disregard whether or not one has the right so to act, * * *.' It is because of this element that a defendant is entitled to produce evidence, and to an instruction, with respect to his good faith and actual belief. United States v. Murdock, 290 U.S. 389, 396, 54 S.Ct. 223, 78 L.Ed. 381 (1933).

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n6. Violations of § 7201 Internal Revenue Code of 1954.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

The income tax returns were introduced, and several witnesses testified to the preparation of the returns and to conversations with defendant about the sources of his income for those years. A Government witness testified to a summary of the returns and the written summary was introduced into evidence. The effect of all this testimony was to show that defendant had an income from [**13] gambling in 1940 through 1955 of about 'one million two hundred thousand dollars.'

The element of willfulness or motive, in the sense of 'bad faith,' involved in the offense charged is in the implied charge of an affirmative deliberate claim of a business expense deduction made when defendant knew he was not lawfully entitled to the deduction. The willful, or 'bad faith,' element is the deliberate making of the false statement, not the making of an honest mistake of judgment. Spies v. United States, 317 U.S. 492, 63 S.Ct. 364, 87 L.Ed. 418 (1943); United States v. Murdock, 290 U.S. 389, 54 S.Ct. 223, 78 L.Ed. 381 (1933). The motive for the willfulness is not an element. Testimony that defendant was not employed furnishes a basis upon which the jury may draw inferences that defendant knew or ought to have known that he was not a 'promoter of beer sales,' or 'agent,' for Premium and therefore could not lawfully claim the deduction, and consequently was willful in making the false statement. So far as the offense charged is concerned, proof of an ulterior motive or intent of defendant in making the 'switch' in reporting income in 1956 or in creating a 'facade' [**14] n7 is not a relevant circumstance to support an inference that defendant was willful, in the sense of harboring 'bad faith,' in making the false statement. The disputed evidence is not admissible on authority of the illustrations given in Spies v. United States, 317 U.S. 492, 499, 63 S.Ct. 364, 87 L.Ed. 418 (1943). The Court there was discussing the willful element in a tax evasion case, and not the willful element in a charge under § 7206(1).

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n7. The Government presented the evidence to show that defendant made the alleged false statement as part of a facade behind which (in 1956) he made a switch to falsely reporting employment income from Premium instead of reporting gambling income from undisclosed sources.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

The impact of this testimony on the trial judge indicates the probable prejudicial impact the testimony had on the [*138] jury. In denying the defendant's motion for a new trial, the trial court said:

'I don't know how a defendant could have been engaged in that kind of enterprise, [**15] it would seem to me, without relying on the connivance of certain public officials. That is not in evidence, but I think that a reasonable inference from the record in this case. * * * I think the only conclusion one can draw from the huge amounts of income reported by the defendant and as revealed from the evidence is that this is a malignancy, this professional gambling, which has penetrated all levels of our society, and that it is a national calamity.'

We conclude that the highly prejudicial evidence was not relevant and was inadmissible, that the court had no discretion to admit it, and that the careful instruction with respect to the evidence could not cure the error because the evidence should not have been admitted.

The trial court erred also in precluding defendant from introducing his copies -- Copies C -- of the W-2 forms filed with his return for the three years in the indictment. Copies B of these forms, which had been attached to the returns filed by defendant and wife, were detached from the returns before the latter were submitted to the grand jury. The defendant was entitled, on the employment issue, to have the jury see his copies of the W-2 form. The [**16] counterparts of these -- Copies D -- were part of Premium's income tax returns, and accordingly were statements, of wages paid defendant, made under penalty of perjury by Premium, relevant to the defense. Defendant's right was not fully served by having the jury get the information by looking at his statement in his income tax return, or by testimony given with respect to the forms by Premium's bookkeeper. Their statements would probably not have the same effect in proof of his employment as the copy of the sworn statement of Premium.

There was another erroneous ruling. The prosecution witness Cutinelli testified that in the latter part of 1958 he was interviewed by Government agent Butkovich on three occasions and his remarks were reduced to writing on these occasions. He saw two of the statements and signed them after they were read to him. One statement was turned over to defense counsel. The second one was submitted to the court in camera. The Government denied it had a third statement. Defendant moved for its production under § 3500. n8 Government said it searched and could find none. A similar occurrence took place in connection with the Government witness Smetana. [**17] The court declined to permit defendant to prove that the statements not found by the Government were in existence. This was error, Campbell v. United States, 365 U.S. 85, 81 S.Ct. 421, 5 L.Ed.2d 428 (1961), and the ruling as to relevancy should not have been based, even in part, on statements of Government counsel. n9 Section 3500 is construed by the Supreme Court to require the judge to make the determination. Scales v. United States, 367 U.S. 203, 258, 81 S.Ct. 1469, 6 L.Ed.2d 782 (1961); Palermo v. United States, 360 [*139] U.S. 343, 361, 79 S.Ct. 1217, 3 L.Ed.2d 1287 (1959) (concurring opinion).

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n8. 18 U.S.C. § 3500. 'Demands for production of statements and reports of witnesses

'(b) After a witness called by the United States has testified on direct examination, the court shall, on motion of the defendant, order the United States to produce any statement (as hereinafter defined) of the witness in the possession of the United States which relates to the subject matter as to which the witness has testified. If the entire contents * * * relate to the subject matter * * * the court shall order it to be delivered directly to the defendant for his examination and use.' [**18]

n9. 18 U.S.C. § 3500(c) 'If the United States claims that any statement ordered to be produced * * * contains matter which does not relate to the subject matter of the testimony * * * the court shall order the United States to deliver such statement for the inspection of the court in camera. * * *'

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

No error is found by this court on other points raised by defendant but not discussed in this opinion.

For prejudicial error at the trial, the judgment is reversed and the cause remanded for new trial, consistent with the rules announced in this opinion.

CONCURBY:

DUFFY

CONCUR:

DUFFY, Circuit Judge (concurring).

$ 1, 2$ I agree with Judge KILEY that if the trial of this case were free from prejudicial error, the evidence viewed most favorably to the Government would support the verdict and judgment. I also agree the indictment was sufficient on defendant's motion to dismiss. However, a careful study of the record convinces me that prejudicial errors were committed, and that there is no escape from the conclusion that a new trial must be ordered.

It is will to bear in [**19] mind that this is not a tax evasion case. The indictment charged violations of Title 26, § 7206(1), the so-called False Statement statute. Taxpayer reported income from Premium Beer Sales, Inc. of $ 42,862.25 for 1956; $ 67,540.85 for 1957 and $ 68,871.70 for 1958, and paid income taxes on the basis of these receipts. However, he claimed a deduction of $ 515.51 in 1956, $ 1726.76 in 1957 and $ 1753.66 in 1958 as a portion of his automobile expenses while acting as agent for Premium. It is the Government's claim that taxpayer was not employed by Premium, hence the statements in defendant's tax returns as to the relatively small deductions, were false.

For some years past, defendant has received wide publicity in the press in the Chicago area, and elsewhere, as the reputed leader of an organization or group sometimes known as the Syndicate, said to be of great influence and controlled or run by hoodlum interests. When the instant charges were brought, all newspapers and other news media in the Chicago area gave wide publicity to the charges against defendant and the impending trial. At each step of the proceedings, the public was given vivid accounts, often mentioning defendant's [**20] reputed background. The sensational nature of the news stories made it extremely difficult for the defendant to have a fair trial in the Chicago area, unless the jury were sequestered.

Pertinent in the statement of Mr. Justice Douglas, n1 'A defendant, however, is on trial for a specific crime, and is not to be condemned, imprisoned, or executed for what laymen would call his bad character or reputation. See Michelson v. United States, 335 U.S. 469, 475-476, 69 S.Ct. 213, 93 L.Ed. 168. * * * At other times the papers may so beat the drums of prejudice and passion as to make it doubtful whether a trial in the local courthouse can be fair to a particular defendant. * * * The point is that our remedy for excessive comment by the press is not the punishment of editors, but the granting of new trials, changes in venue, or continuances to parties who are prejudiced.' Here, defendant did not ask for a change of venue. However, requests for continuances based upon illness of principal counsel, were denied.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n1. 'The Public Trial and the Free Press.' 46 A.B.A. Journal, p. 841.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**21]

The trial of this case extended over eight weeks. On the first day of the trial, on the voir dire, the District Court did admonish the prospective jurymen not to read about the trial in the newspapers or listen to the radio or TV accounts of the trial. However, the sensational headlines continued throughout the eight weeks, and although the District Judge frequently was requested by defendant's counsel to question the jury as to whether these accounts had come to the attention of any of the jurors, he refused to do so; nor did he give any further cautionary instructions. n2

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n2. In his final instructions to the jury, the trial judge did recall the admonition he had given more than eight weeks previously about reading press accounts of the trial. As the jury, at that time, was about to be locked up in the jury room, the admonition would seem to be a bit late.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

[*140] The jury separated each night. One would have to be naive indeed to think that even a well-intentioned juror could escape the bombardment [**22] of flaming headlines in newspapers and the sensational reporting of the trial on TV and radio Although I do not say it was the trial judge's duty to examine jurors separately each time a motion was made by defendant's counsel, I believe that as a minimum, the trial judge should have frequently repeated the admonition given on the first day of the trial. Under somewhat similar circumstances, some trial judges have adopted the practice of giving such an admonition at the close of each day's session of a trial. This is a good practice. To do so would not consume more than thirty seconds each time it was given.

The dissenting opinion argues there is no affirmative proof in this case that any juror read any newspaper account of the trial or listened to radio or TV accounts thereof. However, counsel for defendant took the only course open to them in moving that the trial judge ascertain whether any juror had read or heard such accounts. When the judge declined to act, there was nothing further that defense counsel could do in that respect.

Newspapers may properly print information which jurors, in a particular case, should not know. Rules of evidence are designed to protect an accused [**23] from prejudice. Testimony which a judge would not receive in evidence should not come to the juror's attention by means of press, radio or TV. I hope we have not reached the point in the trial of criminal cases in this country when jurors will decide the innocence or guilt of a defendant on information other than that received in the usual and proper manner from the witness stand. Where jurors are permitted to separate each night during a trial, which is usually the case, and where public sentiment has been aroused by sensational news stories often containing information which could not be received in evidence at the trial, the trial judge has a heavy duty to do everything in his power to assure a fair trial to the defendant.

The trial court erred in permitting the Government to introduce defendant's tax returns without the W-2 forms being attached, and by preventing defendant from introducing his duplicate copies of such forms. These forms are statements by the employer showing the Social Security number of the employee, the total wages paid to the employee, and the total amount deducted and withheld as income tax. Any employer furnishing a false statement is subject, by federal [**24] statute, to fine and imprisonment. A duplicate copy must be furnished to the employee.

As defendant was charged with making false statements in his income tax returns, he was entitled to have those returns received in evidence in the same condition as they were when he executed and filed same. If the Government's employees had detached and destroyed those W-2 forms, the Court should have permitted the duplicates thereof to be received in evidence.

I do not understand the statement in the dissenting opinion that the W-2 forms would have been merely cumulative evidence. The principal and controlling question in the case at bar is whether defendant had been an employee of Premium during the years in question. The defendant had the right to bring in all available pertinent evidence to prove his contention. The W-2 forms had been executed by Premium under a statute providing a penalty for making a false statement, and they designated defendants as an employee of Premium. Apparently the forms were executed prior to any date when the Government had raised any question as to the validity of the claimed employment. If, in fact, the original forms had been destroyed, the duplicates should [**25] have been received in evidence. In my view, there was no justification for excluding such evidence because it was 'cumulative' or for any other reason.

I fully agree with Judge KILEY that the admission of defendant's federal [*141] income tax returns from 1940 through 1955 was prejudicial error. The returns and testimony with reference to same, disclosed a total income of about $ 1,200,000 for those years received principally from gambling and upon which income taxes of nearly a half million dollars had been paid. There was no evidence in this case of gambling income received by defendant since 1955. The stated reason for their admission was motive.

The Government prosecutors said they would not seek to make use of the sixteen tax returns which antedated the charges in the indictment until they had 'presented completely our evidence of falsity in the returns.' Before any such proof was presented, the trial judge admitted the returns into evidence and copies of the 1940-1955 returns were promptly turned over to newspaper reporters, apparently by the prosecutors. Upon objections by the defendant, the trial judge stated he could not impound evidence that had been received. [**26]

Of course, the evidence of another offense wholly independent of the one charged, is inadmissible. This was not a tax evasion case. No claim was made in this case that the former returns violated the law. The apparent purpose of the Government was to show that over a period of many years, defendant was a big-time gambler. The manner in which the 1940-1955 income tax returns was handled, in my opinion, was prejudicial to the right of the defendant to have a fair trial on the charges which were then before the Court.

Defendant's counsel demanded the production of statements in the hands of the Government in order tha they might be examined under the terms of the Jencks Act, 18 U.S.C. § 3500. Some of these were examined by the trial judge in camera. Defendant claims that in each such case, the Judge adopted completely the deletions suggested by Government counsel. I express no opinion on that point. However, the Judge did not examine in camera some of the other statements withheld by the Government. He accepted the representations of Government counsel that the statement did not come within the Jencks Act. No matter how great was the Judge's confidence [**27] in the statements of Government's counsel, it was the Judge's responsibility to make the examination himself. It was his non-delegable duty to do so.

Having reached the conclusion that defendant did not have a fair trial, I concur in the judgment ordering a new trial. My feeling is well expresses in the statement in the concurring opinion of Judge Clark in United States v. Bufalino, 2 Cir., 285 F.2d 408, 420, 'For in America we still respect the dignity of the individual, and even an unsavory character is not to be imprisoned except on definite proof of specific crime.'

DISSENTBY:

SCHNACKENBERG

DISSENT:

SCHNACKENBERG, Circuit Judge (dissenting).

1. In the majority opinion, the court states defendant's contention that '* * * the court erred in denying various motions, for mistrial and to poll the jury, based upon prejudicial newspaper publicity.' Following its discussion of this contention, the court concludes:

'The motions for mistrial during void dire and later, and the motion to poll the jury after the Bronge incident, were addressed to the court's discretion. * * * Under the 'special facts' of this case, however, we conclude that the rulings failed to provide adequate [**28] precautionary measures in aid of defendant's right to a fair trial.'

Inasmuch as the court does not hold nor even discuss an abuse of discretion by the district court, it would seem that this court's conclusion from the 'special facts' is irrelevant.

If, however, this court, is going to review the relevant rulings of the district court on the subject of newspaper publicity, absent a finding of abuse of discretion by that court, the following remarks are directed to that purpose.

2. Defendant had a constitutional right to a fair trial. That trial was, of course, not to be conducted in a vacuum [*142] in society. It was to be conducted in an environment embracing certain immutable circumstances. It was to be held in a community where there was a free press, which published newspapers for the benefit of the community and the country which recognizes and guarantees the constitutional rights of both the defendant on trial and the press.

Obviously the owner of a newspaper does not create news; it gathers and publishes news. Some persons are more newsworthy than others, dependent upon their activities in life. n1 Therefore a metropolitan newspaper would be expected to give little [**29] or no attention in its news columns to a court trial of an obscure citizen, who, by his past life and the litigation in which he is engaged, in not newsworthy, while just the opposite result might occur if the circumstances were to the contrary. We gather from the record before us that defendant, based upon his prior experiences, was considered by the Chicago newspapers to be newsworthy. It follows that the newspapers had a right to publish as news any facts pertaining to him, subject to legal redress in libel actions for any sbuse in that regard.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n1. Judge KILEY recognizes that defendant had 'publicity value.'

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

Another immutable fact is that a court has a right to conduct a public trial of a criminal case in the community where the defendant resides, even though the public character of the trial makes the proceedings therein accessible and subject to report and comment in newspapers, and over the television and radio. n2

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n2. It is significant that defendant's counsel made no motion for a change of venue on the ground of pretrial publicity in regard to defendant. Stroble v. California, 343 U.S. 181-194, 72 S.Ct. 599, 96 L.Ed. 872.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**30]

It is the duty of the trial court under such circumstances to proceed with the trial, and to take proper steps of the end that the activities of news media do not interfere with defendant's receiving a fair trial. The question before us is whether the district court performed its duty properly in this respect in this case.

The jurors who heard this case were selected through a screening process which lawyers call the voir dire examination, extending over a period of three days, during which the judge twice ordered them not to read any newspaper, or listen to radio or television, reference to the trial. Indeed, as prospective jurors were being interrogated about reading newspaper articles mentioning defendant, one remarked that the judge had asked them not to read newspapers.

On September 13, 1960, during the voir dire examination, defendant made a motion for a mistrial based on newspaper articles of September 12 and 13, because of 'adverse publicity * * * in the Chicago daily newspapers * * *'.

A similar motion was made on the following day when, at the suggestion of defense counsel, the court referred to the fact that he had ordered the jurors not to read the newspapers and that [**31] he assumed that the prospective jurors had followed his direction. The court thereupon asked of the jurors:

'I ask each and every one of you, have you followed my direction in that regard?'

A Mrs. Langfeld answered that, while riding on a train, she saw a headline (evidently referring to defendant) on a newspaper held by another passenger. Responding to the court's inquiry as to whether she could still give defendant a fair and impartial trial and consider the case only on the evidence and the law, the juror answered in the affirmative.

No other juror stated that any newspaper reference to defendant had been seen.

Defendant's renewed motion for a mistrial was denied.

In his final instructions, the court impressed upon the jury again what he had already orally instructed them during the trial about their duty not to read newspaper articles or listen to anything said [*143] over the radio or television about the case. n3

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n3. 'Members of the jury, you will recall at the beginning of this trial I instructed and ordered you to refrain from talking with anybody about this case. I also instructed you not to permit anyone to speak with you about it. I also directed and ordered you not to read any articles about the case that might be printed in the newspapers concerning it, and from listening to anything that might be said over the radio or television about it. I assume that as jurors you have complied with the others of the Court in this regard.'

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**32]

Mr. Justice Holmes long ago noted in Holt v. United States, 218 U.S. 245, at 251, 31 S.Ct. 2, 6, 54 L.Ed. 1021:

'* * * If the mere opportunity for prejudice or corruption is to raise a presumption that they exist, it will be hard to maintain jury trials under the conditions of the present day. * * *'

We said, in United States v. Sorcey, 7 Cir., 151 F.2d 899, 903, certiorari denied, 327 U.S. 794, 66 S.Ct. 821, 90 L.Ed. 1021:

'* * * we must not permit the integrity of the jury to be assailed by were suspicion and surmise; it is presumed that the jury will be true to their oath and conscientiously observe the instructions of the court, * * *.'

In Delli, Paoli v. United States, 352 U.S. 232, 242, 77 S.Ct. 294, 300, 1 L.Ed.2d 278, the courts said:

'* * * Unless we proceed on the basis that the jury will follow the court's instructions where those instructions are clear and the circumstances are such that the jury can reasonably be expected to follow them, the jury system makes little sense. Based on faith that the jury will endeavor to follow the court's instructions, our system of jury trial has produced one of the most valuable [**33] and practical mechanisms in human experience for dispensing substantial justice.'

In Opper v. United States, 348 U.S. 84, at 95, 75 S.Ct. 158, 165, 99 L.Ed. 101, the court said:

'* * * Our theory of trial relies upon the ability of a jury to follow instructions. * * *'

We cannot ignore the admonitions of these cases and seize upon suspicion and surmise or the mere opportunity for prejudice as a basis for overturning the verdict of a jury, whose members swore to try the case according to the law and the evidence, and who were selected by counsel for both sides after a three-day voir dire examination. The weakness of defendant's attack upon this verdict is underscored by its ill-advised reliance on Marshall v. United States, 360 U.S. 310, 79 S.Ct. 1171, 3 L.Ed.2d 1250, where there was no preliminary admonition to jurors not to read the newspapers, and, during the trial, two newspapers got before a substantial number of the jurors. One reported that defendant had a record of two previous felony convictions, and that he admitted practicing medicine with a $ 25 diploma he received through the mail. The other reported that he acted as a physician and prescribed [**34] restricted drugs, and that he once served a term in the Oklahoma penitentiary for forgery. As the Supreme Court pointed out in Marshall, at 312, 79 S.Ct. at 1173:

'* * * We have here the exposure of jurors to information of a character which the trial judge ruled was so prejudicial it could not be directly offered as evidence. * * *' (Italics supplied.)

In the case at bar the contrasting fact is that there is no affirmative evidence that any juror was exposed to any of the alleged prejudicial newspaper publicity. We have no right to find such exposure in the face of the admonitions of the court and our judicially well-grounded unwillingness to impeach the integrity of the members of a jury by mere suspicion and surmise.

Judge KILEY has cited three times Coppedge v. United States, 272 F.2d 504, a 1959 decision by the Court of Appeals [*144] of the District of Columbia. He comes to the conclusion therefrom that in the case at bar the trial judge 'should have, by the careful examination of each juror, out of the presence of the others, determined the effect of the articles on those who had read them and whether they had discussed the articles with [**35] others.' However, there was a clear factual basis in Coppedge to distinguish it from the case at bar. In that case between the third day of the trial and the beginning of the fourth day thereof, two Washington newspapers published accounts of the trial, including statements made in court, out of the presence of the jury, to the effect that one Clarence Thompkins, a prosecution witness, was distinctly afraid of defendant and refused to testify against him, and that Thompkins saw defendant ummercifully beat, pistol whip and knock the teeth out of Thompkins' brother. The prosecutor told the court that he thought Thompkins had a reasonable basis for his fear because defendant was a very vicious criminal.

Before the trial resumed, one newspaper account said that defendant was serving a prison term for assault with a deadly weapon on Thompkins' brother.

When the trial resumed, defense counsel moved for a mistrial, presenting these articles to the court and requesting the court to interrogate the jurors. The court then asked the members of the jury whether any of them had read either of the articles. Four of the regular jurors and one of the alternate jurors raised their hands. The [**36] court then told the jury that the articles must not affect their decision and asked if any who had raised his hand thought that he could not bring in a verdict after considering only the evidence and the court's instructions. No juror indicated by raising of hand that he could not bring in such a verdict.

The court then denied the motion for a mistrial. However, the reviewing court pointed out 'prior to the foregoing occurrences the court had not admonished the jurors against reading newspaper articles or listening to broadcast accounts relating to the trial.' It mentioned that the admonition of the trial court to the jury that they not discuss the case with anyone and to keep an open mind did not mention newspaper or newspaper articles.

The court of appeals also noted that the trial court made no reference to the matter in his final instructions to the jury.

It held that the inquiry made of the jurors by the court concerning their reading of the newspaper articles was not adequate for the protection of the defendant and significantly said that the court knew which of the regular jurors had read the newspaper articles, but no individual inquiry was addressed to these persons as [**37] to the possible influence of the article upon each of them. There was no admonition that jurors who had read the articles must not reveal their purport to the remaining jurors. The reviewing court concluded its reasoning upon this point by saying, 272 F.2d at 508,

'* * * In view of the nature of the articles the court should have made a careful, individual examination of each of the jurors involved, out of the presence of the remaining jurors, as to the possible effect of the articles.' (Italics supplied.)

With the soundness of that holding we have no disagreement, but the court there was confronted with facts fundamentally opposite to those before us in this case. There four jurors admitted that they had read the prejudicial newspaper articles. Here there is no proof, and no contention that there is any proof, that any of the jurors read any of the alleged prejudicial newspaper articles. On the facts the two cases are as different as black and white. Hence the use of Coppedge as authority for the statement that the trial judge in the case at bar should have carefully examined 'each juror, out of the presence of the others', to say the least, is baseless. Further, [**38] the suggestion that such individual interviews would have tended to overcome reluctance to speak out implies a belief in the existence of an unusual shyness or an actual feeling of [*145] guilt on the part of the jurors in this case, when nothing indicates anything but that they were performing their duties with a feeling of responsibility and pride as American citizens.

3. In proving its case, the government introduced defendant's income tax returns for the years immediately preceding the taxable years involved in the indictment, that is to say for 1940 through 1955, and a summary thereof, showing that for those years he reported a total income of $ 1,155,584.17 from sources identified only as 'miscellaneous' or 'various', or from sources identified by name which were shown to be proceeds from gambling. The returns showed other income from identified sources amounting to $ 14,200.

Testimony introduced tended to show that in 1949 agent Ned Klein interviewed defendant, his attorney Eugene Bernstein and one Guzik, in the attorney's office, and that Guzik told the agent that the income reported under the hearing 'Guzik and Accardo' in the 1946 return and as 'Miscellaneous' in [**39] the 1947 return was money won on wagers in sporting events and that there were no records of these transactions.

Agent Arthur W. Hill testified that in 1959 he interviewed attorney Bernstein in reference to an item of $ 20,000 in reported income on defendant's 1953 return and was told that there was no record thereof and that said return was filed prior to the time that notification to keep adequate records was received, as noted below.

In February 1954, defendant was notified by a registered mail letter that a determination had been made by the Internal Revenue Service that such records as the taxpayer kept had been deemed inadequate by the Service and that the taxpayer was required to keep detailed records of gross amounts received, dates, nature of the transactions and similar details as to deductions.

On October 5, 1955, by letter defendant was requested to give the district director of internal revenue records supporting the items of income and deductions reported in defendant's 1954 return. Attorney Bernstein then gave the agent a document purporting to show that such an item, as reflected in the summary aforesaid, of 'Misc. Income * * * 20,000.00', represented horserace [**40] winnings.

The government's theory was that defendant's purported employment by Premium was in name only and hence that the deductions claimed for automobile business expenses for 1956, 1957 and 1958 were false; and that defendant thus sought to convey to the Internal Revenue Service the false impression that he was devoting his time and effort to the sale and promotion of beer products, and by this means to interfere with the Service's investigation and determination of this true tax liability. According to the government's theory, the motive for defendant's falsification was to establish records to support income and deductions appearing on his 1954 income tax return, as requested by the Service on October 5, 1955.

The evidence offered by the government and admitted, as above referred to, was clearly relevant and no error occurred in that respect. Nothing was said in Spies v. United States, 317 U.S. 492, 63 S.Ct. 364, 87 L.Ed. 418, which is inconsistent with the admission of this evidence. In fact, its language clearly supports an affirmance herein. For instance, the court said, at 499, 63 S.Ct. at 368:

'* * * we would think affirmative willful attempt [**41] may be inferred from conduct such as * * * covering up sources of income, * * * and any conduct, the likely effect of which would be to mislead or to conceal. If the tax-evasion motive plays any part in such conduct the offense may be made out even though the conduct may also serve other purposes such as concealment of other crime.'

Judge KILEY recognizes the distinction between the willfulness or bad faith element involved in the deliberate making of a false statement and the making [*146] of an honest mistake of judgment. The law entrusted to the jury the function of deciding which factor motivated defendant. This was a question of fact. The answer is evident in the verdict, which was approached by the district court.

4. The failure of the government to produce at the trial copies of the W-2 forms which had been attached to defendant's returns filed for the years in question is not ground for setting aside the verdict and reversing the judgment below. Evidence showed that, according to government procedure, the W-2 form is removed from the return during the initial processing and forwarded to a processing center in Kansas City, Missouri, where, after a period of time, [**42] it is destroyed. The W-2 forms for the years in question would have been destroyed by the time of the trial below. Whether these forms were physically present at the trial is immaterial, because of the fact that they originally accompanied the returns and there was proof at the trial that they reflected the amount of money paid each year to defendant and the amount deducted therefrom for withholding and social security taxes. If they could have been, and were, produced at the trial, their purpose would have been the same as other evidence introduced by the defense for the purpose of proving the contention that defendant was employed as a salesman by Premium Beer Sales. As such it would have been merely cumulative.

The full significance of the missing W-2 forms was established before the jury by other testimony, including that of Marguerite Mahoney, Premium's bookkeeper, who actually prepared these forms for defendant. In the course of her testimony she said, in effect, that she did not know of any services he performed for Premium.

For the same reasons, the court did not err in refusing to receive in evidence defendant's copies of these W-2 forms.

5. For the purpose of proving [**43] that defendant rendered no sales or promotional services to Premium, the government produced numerous witnesses who, according to the evidence submitted, were in positions to have known if such services had been rendered. They testified to the effect that they knew of none. Numerically they consisted of twenty-five persons, according to the government, or twenty-two persons, according to the defense.

Two of these witnesses were Cutinelli and Smetana. Judge KILEY relies upon the action of the district court in not granting a motion of defense counsel for the production of an alleged statement by Cutinelli and in refusing to permit defendant to prove that two alleged statements (one by Cutinelli and one by Smetana), not found by the government, were really in existence. He cites 18 U.S.C.A. § 3500(b) and (c). n4

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n4. Examination of the trial court transcript reveals that that court painstakingly investigated and made a ruling upon these points and that not less than 33 pages of proceedings are devoted to this matter of Cutinelli and Smetana.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**44]

Even if it be admitted arguendo that the Cutinelli and Smetana oral testimony was inadmissible, the error in admitting that evidence was harmless because the fact intended to be proved thereby has been fully shown by other evidence, overwhelming in its nature, which is admittedly competent. This principle is well-established. 24 C.J.S. Criminal Law § 1915(c).

For these reasons, I would affirm the judgment of the district court.

8 of 14 DOCUMENTS

Anthony M. ACCARDO, Appellant, v. UNITED STATES of America, Appellee

No. 13691

UNITED STATES COURT OF APPEALS DISTRICT OF COLUMBIA CIRCUIT

102 U.S. App. D.C. 4; 249 F.2d 519; 1957 U.S. App. LEXIS 4031

June 20, 1957, Argued

October 25, 1957, Decided

COUNSEL:

[**1]

Mr. Gerald G. Schulsinger, Washington, D.C. (appointed by this Court), for appellant.

Mr. Harry T. Alexander, Asst. U.S. Atty., with whom Messrs. Oliver Gasch, U.S. Atty., Lewis Carroll and Joel D. Blackwell, Asst. U.S. Attys., were on the brief, for appellee.

JUDGES:

Before WILBUR K. MILLER, BAZELON and FAHY, Circuit Judges.

OPINIONBY:

PER CURIAM

OPINION:

[*519]

The appeal is from a judgment of conviction of attempt to commit robbery, in violation of section 22-2902, D.C.Code (1951). The incidents which led to the indictment occurred at a gasoline station owned and operated by the principal witness for the prosecution. Since the defendant did not take the stand, the case turned from a factual standpoint upon the credence the jury would give to the testimony of the principal prosecution witness. While his testimony was not corroborated we think it adequately supports the verdict and that this is so notwithstanding the circumstance that the intent to rob, an essential element of the offense charged, could only be inferred. The witness could have been under no delusion as to his visitor's intent when, as he testified, he 'looked up and into the muzzle of an automatic pistol.' [**2]

[*520] It is contended that remarks of the prosecuting attorney in his summation to the jury were improper and prejudicial. No objection to the remarks was made, and so we do not consider the point except to say that it is not of a character, in the context of the case as a whole, which requires us to pass upon it in our discretion to consider trial questions not raised in the District Court. Lawson v. United States, 101 U.S.App.D.C. 332, 248 F.2d 654, and cases cited. Nor are other errors urged for the first time in this court ground for reversal. n1

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n1. After the case was submitted in this court, a supplemental brief and supporting affidavit were filed with us on behalf of appellant, growing out of the distribution by the clerk of the District Court to petit jurors of a manual entitled 'Jury Service,' said to contain guides to the jury inconsistent with the rights of defendant. The problem thus created is not initially for decision in this court in the absence of any motion or other proceedings with respect to it in the record made in the District Court.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**3]

Affirmed.

DISSENTBY:

BAZELON

DISSENT:

BAZELON, Circuit Judge (dissenting).

The complainant, the proprietor of a gas station, testified that, after he had locked up for the night, a man rapped at his door and motioned to him to come to the door. He motioned to the man to go to an open window, which the man did. There followed some talk about a fan belt for an automobile and then the man produced a gun and said, 'Now, you go over and unlock that door. I'm coming in.' The complainant, instead of complying with that order locked himself in the washroom and, from the window of that room, summoned help. The gunman fled. The complainant further testified that appellant was the man in question and that he had identified appellant as the offender at a police line-up 34 days after the offense.

Appellant contends that he was entitled to a judgment of acquittal because there was no evidence from which the jury could conclude beyond a reasonable doubt that his purpose in demanding entry was to commit robbery. I think this point is well taken.

In my view the evidence may well be sufficient to sustain a conviction of assault with a dangerous weapon, D.C.Code, § 22-502. Appellant was convicted, [**4] however, of an attempt to commit robbery. To sustain a conviction of that crime, 'it must be shown that the accused intended to commit that particular crime.' Clark & Marshall, Crimes 79 (5th ed. 1952). The only evidence relied on to prove the necessary intent is the fact that he demanded entry at the point of a gun.

It could have been inferred from the evidence, as the Government argues, that appellant's intent in demanding entry into the gas station was to commit robbery. But it could also have been inferred that his intent was something else. The Government says it is unlikely that his purpose was to commit homicide or mayhem because he could have committed those crimes by shooting through the window. Obviously he could also have robbed the complainant without entering the premises, simply by demanding money at the point of his gun. The Government says a finding that appellant's purpose was anything other than robbery would have to be based upon conjecture and speculation because there was no evidence of any other purpose. But neither was there evidence that the purpose was to rob. What the argument for affirmance comes to, then, is that, though several different intents [**5] could possibly be inferred from the circumstances, the inference that the intent was to rob is, in the light of common experience, more probable than any other. But proof beyond a reasonable doubt, while it does not mean proof to a certainty, does mean proof beyond a mere probability. Since every element of a criminal charge must be proven by the prosecution beyond a reasonable doubt, proof that the necessary specific intent is merely more probable than any other is insufficient to sustain a conviction. Curley v. United States, 81 U.S.App.D.C. [*521] 389, 160 F.2d 229, certiorari denied, 1947, 331 U.S. 837, 67 S.Ct. 1511, 91 L.Ed. 1850; Cooper v. United States, 1954, 94 U.S.App.D.C. 343, 218 F.2d 39; Scott v. United States, 1956, 98 U.S.App.D.C. 105, 232 F.2d 362.

For its contention that the evidence here was sufficient to permit a conclusion beyond a reasonable doubt that appellant intended to rob, the Government relies on United States v. Baker, D.C.S.D.Cal.1955, 129 F.Supp. 684; People v. Sameniego, 1931, 118 Cal.App. 165, 4 P.2d 809, 5 P.2d 653; People v. Moran, 1912, 18 Cal.App. 209, 122 P. 969; Holbrook v. State, 1927, 37 Ga.App. 106, 138 S.E. 919; and Steadman v. State, [**6] 1888, 81 Ga. 736, 8 S.E. 420. None of these authorities support the Government's position. In Baker the issue was whether the circumstances showed the element of intimidation, intent being admitted. In Moran, as well, intent was not in question, the issue being whether the evidence proved an attempt rather than mere preparation. The court held that 'when one of the defendants pushed open the saloon door with intent to enter and rob the inmates, he was guilty of an overt act that amounted in fact and in law to an attempt to commit the crime of robbery.' 122 P. at page 970. In Holbrook a street hold-up was held to be an attempt to rob, and in Steadman a midnight break-in of a dwelling house was held to show intent to steal. Not only were the circumstances in both of those cases less equivocal than the circumstances in the case before us, but it is not clear that the standard of proof of crime is as high in Georgia as in this jurisdiction. Georgia Code 1933, § § 38-105, 38-110; see 9 Wigmore, Evidence, § 2497, n. 1 (3d ed. 1940). The Sameniego case held intent to rob was 'prima facie' proven by evidence that the accused walked up to the victim's parked car and shot him to death. [**7] But what was there involved was proof of corpus delicti and the court pointed out: 'It is well settled that proof of the corpus delicti beyond a reasonable doubt is not a prerequisite to the reception in evidence of a confession, prima facie proof being sufficient.' 4 P.2d at page 811.

Evidence which may be sufficient to support a verdict in a civil case or a 'prima facie' determination in a criminal case may not suffice where the standard is proof beyond a reasonable doubt. In my opinion the evidence of intent to rob failed to satisfy that standard in this case. I would reverse the conviction.

I also think there is another reason for reversal. The prosecution's case, depending as it did solely upon the testimony of the victim of the crime, was rather weak. But the jury credited that testimony and rejected that of appellant's alibi witness. The issue of credibility was for the jury to decide and, absent error in the process by which it was submitted to the jury, their decision must stand. Appellant urges such error.

In his summation, the prosecutor stated:

'He (complainant) tells you ladies and gentlemen that he is positive the defendant is the man who came to his place [**8] of business that night.

'Ladies and gentlemen, are you going to doubt him? Are you going to say that you have got to put on an array of witnesses here to show that he was the one, that he has got to be corroborated by other witnesses?

'If you do that, ladies and gentlemen, if you take that position you are issuing a license to the robbers and criminals in this jurisdiction to take over the capital of the Nation.

'Are you going to issue that license?'

And in his rebuttal, he added:

'He (defense counsel) tells you that it would be physically impossible for Mr. Hamm to recognize this man as the man who attempted to rob him because he was so excited.

'Ladies and gentlemen, are you going to accept that? Is it going to be said that any time a person is robbed or harmed in this jurisdiction that they are so excited, all they are [*522] watching is the gun, they cannot recognize the person?

'If so why you just issue a license, as I stated before, to increase crime in this jurisdiction. You just can't do it.'

The effect of these remarks was to bolster the weak part of the prosecution's case by an appeal to passion and prejudice. This was plain and prejudicial error and 'the [**9] trial judge should have stopped counsel's discourse without waiting for an objection.' Viereck v. United States, 1943, 318 U.S. 236, 247-248, 63 S.Ct. 561, 566, 87 L.Ed. 734.

12 of 14 DOCUMENTS

UNITED STATES OF AMERICA v. JOSEPH MERLINO, FRANK GAMBINO, RALPH ABRUZZI, STEVEN FRANGIPANI, and ANTHONY ACCARDO

CRIMINAL ACTION NO. 99-0363-01--05

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

2000 U.S. Dist. LEXIS 3049

March 16, 2000, Decided

March 16, 2000, Filed

DISPOSITION:

[*1] Severance motions of Joseph Merlino ("Merlino"), Frank Gambino ("Gambino"), Ralph Abruzzi ("Abruzzi"), Anthony Accardo ("Accardo"), and Steven Frangipani ("Frangipani") DENIED.

COUNSEL:

For JOSEPH MERLINO a/k/a SKINNY JOEY, DEFENDANT: JOSEPH C. SANTAGUIDA, PHILA, PA USA. EDWIN J. JACOBS, JR., JACOBS AND BARBONE, ATLANTIC CITY, NJ USA.

For FRANK GAMBINO, DEFENDANT: NIALENA CARAVASOS, F. EMMETT FITZPATRICK LAW OFFICES, PHILA, PA USA.

For RALPH ABRUZZI aka "Ralphie Head", DEFENDANT: JEFFREY M. MILLER, NASUTI & MILLER, PHILA, PA USA. BRIAN J. MC MONAGLE, MC MONAGLE, PERRI & MC HUGH, PHILADELPHIA, PA USA.

For STEVEN FRANGIPANI aka "Snitch", DEFENDANT: JOSEPH P. CAPONE, PHILA, PA USA.

U. S. Attorneys: ZANE D. MEMEGER, U.S. ATTORNEY'S OFFICE, PHILA, PA USA. BARRY GROSS, U.S. ATTORNEY'S OFFICE, PHILA, PA USA.

JUDGES:

HERBERT J. HUTTON, J.

OPINIONBY:

HERBERT J. HUTTON

OPINION:

MEMORANDUM AND ORDER

HUTTON, J.

March 16, 2000

Presently before the Court are the severance motions of Joseph Merlino ("Merlino") (Docket No. 64), Frank Gambino ("Gambino") (Docket No. 99), Ralph Abruzzi ("Abruzzi") (Docket No. 98), Anthony Accardo ("Accardo") (Docket No. 101), and Steven Frangipani [*2] ("Frangipani") (Docket No. 110), Merlino's Supplemental Letter Brief in Support of Severance (Docket No. 114), the Government's Response Opposing Defendant Merlino's Motion for Severance Under Rule 14 of the Federal Rules of Criminal Procedure (Docket No. 82), the Government's Consolidated Response Opposing Motions for Severance Filed by Defendants Gambino, Abruzzi, and Accardo (Docket No. 106), the Government's Supplemental Response Opposing Defendants Merlino's, Gambino's, Abruzzi's, and Accardo's Motions for Severance Under Rule 14 of the Federal Rules of Criminal Procedure (Docket No. 108), the Government's Response Opposing Motion for Severance Filed by Defendant Steven Frangipani (Docket No. 109), and the Government's Response to Supplemental Letter Brief Filed in Support of Defendant Merlino's Motion for Severance Under Rule 14 of the Federal Rules of Criminal Procedure (Docket No. 115). For the reasons stated hereafter, each severance motion currently before the Court is DENIED.

I. BACKGROUND

Merlino was arrested on drug charges by Federal Bureau of Investigation agents on June 28, 1999. He was ordered temporarily detained for a pretrial detention hearing. [*3] On June 30, 1999, Merlino was charged in a two count indictment with conspiracy to distribute more than five kilograms of cocaine in violation of 21 U.S.C. § 846, and with unlawful use of a communication facility in relation to a drug trafficking offense, in violation of 21 U.S.C. § 843(b).

During the course of the June 1999 arrest, Merlino allegedly made certain statements to Detective Mark Pinero ("Pinero"). These statements led to Merlino being charged under 18 U.S.C. § 115(a)(1)(B) and 18 U.S.C. § 115(a)(1)(B) for threatening Pinero and his family.

On July 1, 1999, Chief United States Magistrate Judge James R. Melinson held a pretrial detention hearing. Magistrate Judge Melinson found there was probable cause to believe that Merlino had committed the offenses with which he was charged and ordered that Defendant be detained pending trial pursuant to the Bail Reform Act of 1984, 18 U.S.C. § 3142. See Pretrial Detention Order, filed July 2, 1999, by Honorable Magistrate Judge James R. Melinson, United States v. Merlino, 1999 U.S. Dist. LEXIS 11511, Cr.No.99-363.

On July 12, 1999, Defendant [*4] filed with this Court a Motion to Reconsider the Pretrial Detention Order and to Permit Bail. On July 27, 1999, the Government filed a Response to the Merlino's Motion as well as its own Motion and Memorandum for Hearing on Merlino's Pretrial Detention. On July 28, 1999, this Court held a hearing on the two motions regarding Merlino's pretrial detention. On July 30, 1999, the Court denied Merlino's Motion to Reconsider the Pretrial Detention Order and to Permit Bail. The Court's decision relied in part on the fact that Merlino's second indictment indicated that he posed a significant threat of death or serious physical injury to Pinero and his family.

A seven day jury trial on the second indictment commenced on October 12, 1999, before the Honorable Jerome B. Simandle, United States District Judge for the District of New Jersey. The jury returned a verdict of "not guilty" on both counts. See Judgment of Acquittal, filed October 21, 1999, by Judge Jerome B. Simandle, United States v. Merlino, Cr.No.99-430 (JBS). Subsequent to Judge Simandle's decision, this court also upheld its prior decision to deny Merlino's motion for bail and pre-trial release.

On December 15, 1999, a [*5] grand jury returned a twelve-count superseding indictment (the "Superseding Indictment") which alleges that Merlino's authorization of the drug activities, as the Acting Boss of the Philadelphia La Cosa Nostra ("LCN"), was part of a larger pattern of racketeering activity engaged in by members and associates of the Philadelphia LCN to generate money. The Superseding Indictment alleges that each defendant was a member of or was associated with an Enterprise, as defined in 18 U.S.C. § 1961(4), known as the Philadelphia LCN and which was headed by Merlino. Frank Gambino is alleged to have been a "soldier" and a "made" member of the Philadelphia LCN. Abruzzi, Accardo, and Frangipani are alleged to have been associates but not made members of the Philadelphia LCN.

The Superseding Indictment also alleges that Merlino authorized and directed Gambino, Abruzzi, Accardo, and Frangipani to receive and distribute stolen goods on behalf of the Philadelphia LCN. Moreover, as the Acting Boss of the Philadelphia LCN, Merlino allegedly approves all criminal activities conducted by LCN members and their associates, and also allegedly receives a portion of the monies generated [*6] through the criminal activities conducted by LCN members and their associates.

Regardless of their particular roles in the Enterprise, each defendant is alleged to have conducted and participated in the affairs of the Enterprise: (1) to perpetuate the Enterprise by concealing from law enforcement authorities the existence of the Enterprise, the identity of its members and associates, the manner in which it conducted its affairs, and the decisions and orders given by the Enterprise's leaders to those working for the Enterprise; and (2) to expand the reach and profitability of the Enterprise.

As discussed above, the focus of the Government's original two-count indictment was Merlino's involvement in a drug conspiracy. It is alleged that in an effort to expand the reach and profitability of the Philadelphia LCN, Merlino included, inter alia, Robert Luisi, Jr, ("Luisi") and Shawn D. Vetere ("Vetere"), each of whom was based in Boston, Massachusetts, in the Enterprise's efforts in Boston. n1 At various times, Merlino authorized and approved members and associates to traffic in illegal drugs.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n1 Luisi and Vetere are not defendants in this action.

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [*7]

The focus of the Government's Superseding Indictment is broader than that of its original indictment. Not only does the Superseding Indictment include charges against Merlino arising from his alleged participation in Boston drug conspiracy, but it alleges that each named defendant trafficked in stolen merchandise. Therefore, while the Superseding Indictment does not allege that defendants Gambino, Abruzzi, Accardo, and Frangipani participated in the drug conspiracy charged to Merlino, it does allege that they and Merlino participated in a racketeering conspiracy. The acts which are charged as part of the racketeering conspiracy include the receipt of stolen televisions, television/vcr combinations, baby formula, ceiling fans, toy trains, bicycles, and sweat suits. Each defendants is also charged with conspiring to receive stolen goods. Merlino is specifically charged with violations of 18 U.S.C. § § 1962(d), 1962(c), 659, 2, and 371 and 21 U.S.C. § 843(b). The Superseding Indictment charges Gambino and Abruzzi with violations of 18 U.S.C. § § 1962(d), 1962(c), 659, 2, and 371. Accardo and Frangipani are charged with [*8] violations of 18 U.S.C. § § 1962(d), 659, 2, and 371.

Before the Court is Merlino's severance motion which seeks the following: (1) dismissal on the basis of misjoinder; (2) severance of the drug charges from the charges of a RICO conspiracy; and/or (3) severance of his trial from the trial of his co-defendants. Defendants Gambino, Abruzzi, Accardo, and Frangipani each seek severance of their RICO conspiracy cases from that of co-conspirator Merlino. On February 25, 2000, the Court conducted a hearing on the defendants' pending severance motions.

II. LEGAL STANDARD

There exists a preference in the federal system for joint trials of defendants who are indicted together. See Zafiro v. United States, 506 U.S. 534, 537, 113 S. Ct. 933, 937, 122 L. Ed. 2d 317 (1993). Joint trials "play a vital role in the criminal justice system." See id. (citation omitted). Indeed, the Supreme Court has repeatedly approved joint trials because such trials promote efficiency and "serve justice by avoiding the scandal and inequity of inconsistent verdicts." See id. (citation omitted).

Federal Rule of Civil Procedure 8, which governs joinder [*9] in criminal cases, states as follows:

(a) Joinder of Offenses. Two or more offenses may be charged in the same indictment or information in a separate count for each offense if the offenses charged, whether felonies or misdemeanors or both, are of the same or similar character or are based on the same act or transaction or on two or more acts or transactions connected together or constituting parts of a common scheme or plan.

(b) Joinder of Defendants. Two or more defendants may be charged in the same indictment or information if they are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses. Such defendants may be charged in one or more counts together or separately and all of the defendants need not be charged in each count.

Fed. R. Crim. P. 8. "The standards of Rule 8(a) and (b) joinder are nearly the same. Both permit joinder of offenses and defendants, respectively, when a transactional nexus exists between the offenses or defendants to be joined." United States v. Eufrasio, 935 F.2d 553, 570 n.20 (3d Cir. 1991).

The purpose of Rule 8(a) is to promote judicial [*10] economy and to preserve the prosecution's resources. See, e.g., United States v. Taylor, 1992 U.S. Dist. LEXIS 17173, Crim. No. 91-00634, 1992 WL 333589, at *1 (E.D. Pa. Nov. 9, 1992); United States v. Lipari, 1992 U.S. Dist. LEXIS 9929, Crim. No. 92-164, 1992 WL 165799 (D.N.J. July 8, 1992). Rule 8(a) allows free joinder of offenses charged against a single defendant if the offenses charged are (1) based on the same act or transaction, (2) constitute part of a common scheme or plan, or (3) are of the same or similar character. See United States v. Dileo, 859 F. Supp. 940, 942 (W.D. Pa. 1994) (citing 1 Charles A. Wright, Fed. Prac. & P., § 243 (1983)); see also 1 Charles A. Wright, Fed. Prac. & Proc., § 222 (1999). The Third Circuit alternatively stated that for joinder to be proper under Rule 8(a), there must be a "transactional nexus" between the offenses joined. See United States v. McGill, 964 F.2d 222, 241 (3d Cir. 1992) (citation omitted); Dileo, 859 F. Supp. at 942 . Accordingly, with regard to a Rule 8(a) Motion, the dispositive issue generally is whether the two sets of charges are sufficiently related so as to be transactionally [*11] related or part of a common scheme or plan. See United States v. Eufrasio, 935 F.2d 553, 570 n.20 (3d Cir. 1991); Dileo, 859 F. Supp. at 942 .

While Rule 8(a) historically permitted joinder of offenses against one defendant so long as he or she was the only defendant in the case, see, e.g., United States v. Ashley, 905 F. Supp. 1146, 1163 (E.D.N.Y. 1995); United States v. Vastola, 670 F. Supp. 1244, 1261 (D.N.J. 1987), the Third Circuit suggested in dicta that Rule 8(a) might be the appropriate standard for the joinder of multiple offenses against one defendant, even in a multi-defendant case. See Eufrasio, 935 F.2d at 570 n.20. The Eufrasio court stated that "contrary to the jurisprudence in other circuits, when a joinder of offenses charged against the same defendant is challenged, the literal meaning of the Rule requires application of Rule 8(a), irrespective of whether multiple defendants are involved in the case." Id. The Third Circuit cited its Eufrasio dicta in United States v. McGill, 964 F.2d 222 (3d Cir. 1992), but declined to adopt a new rule with regard [*12] to Rule 8(a) joinder. Id. at 241. Therefore, Rule 8(a) remains applicable to only those cases in which there is one defendant.

Rule 8(b) provides substantial leeway to prosecutors who wish to join racketeering defendants in a single trial. See United States v. Eufrasio, 935 F.2d 553, 567 (3d Cir. 1991). The rule allows joinder of defendants charged with participating in the same conspiracy or racketeering enterprise. Id. "Joinder ... of a conspiracy count and substantive counts arising out of the conspiracy [is permitted], since the claim of conspiracy provides a common link, and demonstrates the existence of a common scheme or plan." United States v. Somers, 496 F.2d 723, 729-730 (3d Cir. 1974) (citation omitted). A RICO conspiracy charge provides that required link. n2 Therefore, joinder is allowed against racketeering defendants even where different defendants are charged with different acts, so long as the indictments indicate that all the acts charged against each joined defendant are charged as racketeering predicates or acts undertaken in furtherance of, or in association with a commonly charged RICO enterprise or conspiracy. [*13] Id. (citation omitted).

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n2 The Eufrasio court adopted the reasoning of United States v. Friedman, 854 F.2d 535, 561 (2d Cir. 1988), a Second Circuit decision, which stands for the proposition that joinder of a conspiracy count and substantive counts arising out of the conspiracy is permitted as a claim of a RICO conspiracy provides the common link that is needed and demonstrates the existence of a common scheme or plan. The Friedman court reasoned that although Rule 8(b) limits a prosecutor's power to charge multiple defendants in a single proceeding, that power is probably at its greatest when RICO conspiracy charges are brought. As one judge observed:

The mere allegation of a conspiracy presumptively satisfies Rule 8(b), since the allegation implies that the defendants named have engaged in the same series of acts or transactions constituting an offense. The presence of a substantive RICO count under 18 U.S.C. § 1962(c), and of a RICO conspiracy count under 18 U.S.C. § 1962(d), further broadens the government's power to charge multiple defendants together. A RICO charge under § 1962(c) necessarily incorporates allegations that each of the defendants named was associated with or employed by the same enterprise, and participated in the enterprise by engaging in at least two acts of racketeering related to the enterprise. In short, by loosening the statutory requirements for what constitutes joint criminal activity, Congress limited the force of Rule 8(b) in such situations.

United States v. Friedman, 854 F.2d 535, 561 (2d Cir. 1988) (quoting United States v. Castellano, 610 F. Supp. 1359, 1396 (S.D.N.Y. 1985)). As stated in the Eufrasio decision, the Third Circuit agrees with the Second Circuit's position that a RICO conspiracy charge provides that required link. See Eufrasio, 935 F.2d 553 at 567 (citations omitted).

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [*14]

A party may seek relief from prejudicial joinder under Rule 14 of the Federal Rules of Criminal Procedure. Rule 14 states as follows:

If it appears that a defendant or the government is prejudiced by a joinder of offenses or of defendants in an indictment or information or by such joinder for trial together, the court may order an election or separate trials of counts, grant a severance of defendants or provide whatever other relief justice requires. In ruling on a motion by a defendant for severance the court may order the attorney for the government to deliver to the court for inspection in camera any statements or confessions made by the defendants which the government intends to introduce in evidence at the trial.

Fed. R. Crim. P. 14.

Although joinder is lawful under Rule 8, severance under Rule 14 may be appropriate in cases where joinder creates a risk of substantial prejudice to a particular defendant or the government. See United States v. Spencer, 1999 U.S. Dist. LEXIS 16379, No. 99-256-06, 1999 WL 973856, at *2 (E.D. Pa. Oct. 25, 1999). Thus, Rule 14 recognizes that severance may be appropriate even in the circumstance of lawful joinder of parties or offenses. [*15]

Before a court may consider a motion for severance, said motion must be filed prior to trial. See United States v. Mazza, 1999 U.S. Dist. LEXIS 19419, Nos. CRIM.A. 98-113-1, 98-113-2, 1999 WL 1244418, at *5 (E.D. Pa. Dec. 20, 1999). Severance under Rule 14 is a matter committed to the trial court's discretion. See United States v. Eufrasio, 935 F.2d 553, 568 (3d Cir. 1991). Where a motion is timely filed and prejudice is shown, the trial court still has discretion to deny severance. See Fed. R. Crim. P. 14 ("If it appears that a defendant or the government is prejudiced by a joinder of offenses or of defendants in an indictment or information or by such joinder for trial together, the court may order an election or separate trials of counts, grant a severance of defendants or provide whatever other relief justice requires." (emphasis added)).

Prejudice is the touchstone of a Rule 14 motion for severance. The Third Circuit stated, however, that mere allegations of prejudice are not enough and that a defendant must affirmatively show "clear and substantial prejudice." See United States v. Reicherter, 647 F.2d 397, 400 (3d Cir. 1981); see also United States v. Lipari, 1992 U.S. Dist. LEXIS 9929, Crim. No. 92-164, 1992 WL 165799, [*16] at *10 (D.N.J. July 8, 1992). In so doing, defendant bears the burden of demonstrating that he or she has been prejudiced. See United States v. Spencer, 1999 U.S. Dist. LEXIS 16379, No. 99-256-06, 1999 WL 973856, at *2 (E.D. Pa. Oct. 25, 1999). Defendant must show more than the fact that a separate trial might offer him or her a better chance of acquittal. Spencer, 1999 WL 973856, at *2 (E.D. Pa. Oct. 25, 1999).

In deciding whether to grant a defendant's severance motion, the court should balance the public interest in joint trials against the possibility of prejudice inherent in the joinder of defendants. See United States v. Eufrasio, 935 F.2d 553, 568 (3d Cir. 1991); United States v. Mazza, 1999 U.S. Dist. LEXIS 19419, Nos. CRIM.A. 98-113-1, 98-113-2, 1999 WL 1244418, at *6 (E.D. Pa. Dec. 20, 1999). Prejudice should not be found in a joint trial just because all evidence adduced is not germane to all counts against each defendant or some evidence adduced is more damaging to one defendant than others. See United States v. Balter, 91 F.3d 427, 433 (3d Cir. 1996); United States v. Console, 13 F.3d 641, 655 (3d Cir. 1993). Indeed, the [*17] Zafiro Court stated severance should be granted "only if there is a serious risk that a joint trial would compromise a specific trial right of one of the defendants, or prevent the jury from making a reliable judgment about guilt or innocence." Zafiro, 506 U.S. at 538-39, 113 S. Ct. at 937-38. "Such a risk might occur when evidence that the jury should not consider against a defendant and that would not be admissible if a defendant were tried alone is admitted against a codefendant." Id. at 539, 113 S. Ct. at 938. The Zafiro Court cited three specific examples in which this might occur: (1) "a complex case" involving "many defendants" with markedly different degrees of culpability;" (2) a case where evidence that is probative of one defendant's guilt is technically admissible against only a co-defendant; and (3) a case where evidence that exculpates one defendant is unavailable in a joint trial. Id. at 539, 113 S. Ct. at 938; see also United States v. Balter, 91 F.3d 427, 433 (3d Cir. 1996).

Whether a defendant may be actually prejudiced may depend on the likelihood that the jury will have the capacity to [*18] "compartmentalize" the evidence adduced. See United States v. Sebetich, 776 F.2d 412, 427 (3d Cir. 1985). For example, where many defendants are tried together in a complex trial and the defendants have markedly different degrees of culpability, the risk of prejudice is heightened. See Zafiro, 506 U.S. at 539, 113 S. Ct. at 938. The relevant inquiry regarding "compartmentalization" is whether it is within the jury's capacity to follow the trial court's instructions requiring separate consideration for each defendant and the evidence admitted against him or her. See 25 James Wm. Moore et al.,Moore's Federal Practice 3d § 608.03(3).

The preeminent Third Circuit case on Rule 14 severance is United States v. Eufrasio, 935 F.2d 553 (3d Cir. 1991). At the trial level, the Eufrasio defendants, Idone, Eufrasio, and Iacona were convicted and sentenced for RICO violations, attempted extortion, and illegal gambling. They were charged together and tried jointly before an anonymous jury. Their RICO liability was predicated on attempted extortion, illegal video poker machine gambling, and collecting unlawful debts. Only Idone was [*19] charged and convicted on a separate racketeering predicate of murder conspiracy.

On appeal Idone, Eufrasio, and Iacona alleged the following errors: with respect to the RICO counts, the superseding indictment failed to charge a valid pattern of racketeering activity; evidence of uncharged crimes was admitted without adequate limiting instructions and without articulating a Federal Rule Evidence 403 balance; the district court empaneled an anonymous jury without a hearing and without stating its reasons on the record; and, various insufficiencies of evidence warranted reversal of appellants' convictions. Eufrasio and Iacona also argued that the trial court erred by not severing their trials from Idone's trial when only Idone was indicted under RICO on the murder conspiracy predicate, evidence of which allegedly prejudiced Eufrasio and Iacona. Idone argued that it was error not to dismiss the murder conspiracy charge from his trial, or alternatively, to sever the RICO counts from his trial on the other charges.

Evidence introduced at trial showed that during 1982 and 1983, Idone participated in the affairs of an organized crime enterprise through a murder conspiracy and that during [*20] 1981-1986, all appellants conspired to and did participate in the same enterprise through a pattern of illegal gambling and the attempted extortion of a competitor of their gambling business, and through the collection of unlawful debts. From 1981 to 1986, appellants conspired to participate, and participated knowingly in the Scarfo "Family," a Philadelphia and New Jersey based subdivision of La Cosa Nostra. At times relevant to appellants' convictions, the Scarfo organization was a RICO "enterprise" consisting of approximately 60 full members of LCN, and at least 100 criminal associates. Appellants' participation in Scarfo-related criminal activities resulted in their RICO convictions.

During the period 1981-1986, Idone supervised a crew of soldiers and associates, including Eufrasio and Iacona. Idone's crew participated in the crimes at issue in their trial: the conspiracy to murder Thomas Auferio; the illegal video poker machine gambling business; the attempt to extort competitors of that business; and the collection of unlawful debts. As required by Mafia rules, Capo Idone periodically reported his crew's criminal activities to his Boss, Scarfo. Eufrasio regularly arranged meetings [*21] with Scarfo to facilitate Idone's reporting.

Appellants and their fourth co-defendant, Peticca, who did not appeal, were originally charged in a four count indictment with racketeering, racketeering conspiracy, extortion and illegal gambling. This indictment charged that appellants conspired to and did associate with the Scarfo enterprise through a pattern of racketeering activity occurring over the period 1982-1986. The pattern of racketeering charged against each appellant consisted of extortion and illegal gambling. This original indictment also charged each appellant with collecting unlawful debts, an alternative basis of RICO liability. Eight months later, the government returned another indictment against appellants. This superseding indictment enlarged the pattern of racketeering activity alleged in the original indictment, by charging an additional racketeering predicate against Idone only; he was charged with participating in the Auferio murder conspiracy. The Auferio murder conspiracy, Racketeering Act One in the Superseding Indictment, is the distinguishing difference between the two indictments. Charging the Auferio murder conspiracy as a racketeering predicate resulted [*22] in other differences between the two indictments, but generally speaking, the two indictments are the same but for the murder conspiracy charge against Idone. Both indictments alleged appellants conspired to and did in fact participate in the affairs of the Scarfo enterprise through a pattern of racketeering activity and collecting unlawful debts. Despite the similarities, however, the superseding indictment charged Idone alone with the murder conspiracy predicate.

Before trial, Idone made a motion in the alternative under Federal Rules of Criminal Procedure 8 and 14, to either dismiss the murder conspiracy predicate alleged against him, or to sever his trial on the RICO counts (which incorporated the murder conspiracy predicate) from his trial on the two non-RICO counts (extortion and illegal gambling). Idone's motion was denied. The trial court also denied Eufrasio's and Iacona's pretrial motions to sever Idone's trial from their own, and for a Bill of Particulars on the extortion count. After granting the government's motion for an anonymous jury, the trial court tried appellants jointly.

As previously stated, the jury found each defendant guilty on four counts: conspiring to [*23] participate, and participating in the affairs of an enterprise through a pattern of racketeering activity and the collection of unlawful debt in violation of 18 U.S.C. § 1962(d) and (c) (counts one and two); attempted extortion in violation of 18 U.S.C. § 1951 (count three); and conducting an illegal gambling business in violation of 18 U.S.C. § 1955 (count four). Only Idone was charged with and convicted on a separate racketeering predicate of murder conspiracy.

On appeal, Eufrasio and Iacona argue that joinder of their trials with Idone's constituted reversible error because Eufrasio and Iacona were wholly unconnected with and unaware of the murder conspiracy charged as a racketeering predicate against Idone only. Eufrasio and Iacona alleged that the joinder of their trials with Idone's prejudiced them because the murder conspiracy alleged against Idone infected the entire trial with evidence of uncharged Mafia crimes and the murder conspiracy itself. They claim the joinder exposed the jury to evidence of numerous mob murders and attempted murders related to the Auferio murder conspiracy and the Scarfo/Riccobene [*24] mob war, in which Eufrasio and Iacona did not participate.

The Third Circuit, upon review of the superseding indictment, concluded that charging and proving the Auferio murder conspiracy as a racketeering predicate against Idone, but not against Eufrasio and Iacona, did not preclude Rule 8(b) joinder of all appellants. The court reasoned that the murder conspiracy and all the other acts charged in the case were related and formed a single pattern of racketeering activity, because each was committed in furtherance of the Scarfo enterprise. The Eufrasio court concluded that there was no Rule 8(b) misjoinder of appellants because, consistent with the law of joinder in RICO cases, all the criminal acts charged against each defendant, including the murder conspiracy implicating Idone, were undertaken in furtherance of a single, commonly charged racketeering enterprise and conspiracy.

III. DISCUSSION

The Court hereafter separately considers each defendant's arguments for severance.

A. Merlino's Motion for Severance

Merlino's severance motion implicates both sub-sections of Rule 8. He first argues for dismissal on the basis of misjoinder. See United States v. Camiel, 689 F.2d 31 (3d Cir. 1982). [*25] Generally, the Court looks to the indictment to determine whether the prosecutor joined claims properly. See United States v. Lipari, 1992 U.S. Dist. LEXIS 9929, Crim. No. 92-164, 1992 WL 165799, at *8 (D.N.J. July 8, 1992). In racketeering cases, the allegation of a racketeering conspiracy provides the necessary "common link" to make joinder proper under the theory that there exists a common scheme or plan as required by Rule 8(a). Indeed, a prosecutor's power to join multiple defendants and offenses in a single indictment is formidable in the RICO context. Merlino neither persuasively argues that the "common link" in this racketeering case is insufficient to support joinder nor provides other bases on which this Court can find misjoinder. The Court therefore denies Merlino's prayer for the remedy of dismissal. Notwithstanding a finding of proper joinder, the Court may still order severance.

Merlino also seeks a severance of offenses, whereby his drug charges will be severed from the RICO charges. He contends that the factual bases supporting the counts enumerated in the Superseding Indictment are so unrelated that it would be impossible for a jury to sort out the evidence at trial without [*26] producing "spillover" and "guilty by association" effects, thereby causing him substantial prejudice. (See Merlino's Letter Brief, 12/29/99, at 5).

The Eufrasio court intimated in dicta that Rule 8(a) may be applicable to motions to sever offenses in multi-defendant cases. See Eufrasio, 935 F.2d at 570 n.20. That statement of the Eufrasio court contravenes the historical application of Rule 8(a) to cases in which there was one defendant only. In United States v. McGill, 964 F.2d 222 (3d Cir. 1992), the Third Circuit resolved the ambiguities created by the Eufrasio decision when it expressly declined to adopt a new practice for Rule 8(a) severance. See id. at 241. Therefore, severance of offenses under Rule 8(a) is not available to a defendant in a multi-defendant suit. Accordingly, Rule 8(a) does not permit Merlino to sever his drug charges from the RICO conspiracy charges and his Motion is denied to the extent that he seeks a severance of offenses.

Merlino also seeks severance of the charges brought against him from those brought against his co-defendants. At oral argument, his counsel argued that the other defendants [*27] and their counsel would be "useless ornaments" during the weeks it would take Merlino to defend against the drug charges brought against him. (See Tr., 2/25/00, at p. 9, l. 19-23). Merlino's counsel also argued that during the weeks of trial that would be dedicated solely to the drug charges brought against Merlino, the other defendants would be forced to miss work, would needlessly incur counsel fees as their respective counsel attended a portion of the trial that is not germane to the RICO conspiracy offenses charged, and that this is not "fair" to the other defendants. (See Tr., 2/25/00, at p. 9, l. 19-24). Merlino's counsel concluded that Merlino's severance motion is therefore about what is "fair." The Third Circuit's Eufrasio decision confines the Court's analysis to whether Merlino met his burden of showing clear and substantial prejudice as a result of joinder. Evidencing such prejudice requires more than alleging that acquittal is more likely if severance is granted or that all the evidence that will be adduced will not be germane to a particular defendant. The Court interprets Merlino's Rule 8(b) severance motion to argue that joinder is inappropriate as it is [*28] unfair to his co-defendants. Merlino does not demonstrate that severance is appropriate because the joinder of defendants Gambino, Abruzzi, Accardo, and Frangipani is prejudicial to him. As Merlino fails to demonstrate that the Superseding Indictment's joinder of defendants prejudices him, Merlino does not meet his burden of showing clear and substantial prejudice. See United States v. Reicherter, 647 F.2d 397, 400 (3d Cir. 1981).

Merlino also argues for severance under the authority of Kotteakos v. United States, 328 U.S. 750, 66 S. Ct. 1239, 90 L. Ed. 1557 (1946). Kotteakos was a case in which the government tried to prosecute multiple conspiracies against multiple defendants in a single trial. The trial subjected each alleged co-conspirator to evidence about multiple conspiracies that he or she never joined. In the instant matter, however, the Government alleges that each defendant was a member of a single racketeering conspiracy. (See Superseding Indictment at P 11). Additionally, the Kotteakos case predated the enactment of RICO and it is well settled that RICO allows the inclusion of multiple defendants and multiple offenses [*29] in a single indictment where the defendants agreed to commit a substantive RICO offense. Thus, the prejudicial problems that were present in the Kotteakos case are not present in this case and the Court therefore finds unavailing Merlino's argument that Kotteakos supports severance in this matter.

B. Abruzzi's Motion for Severance

Abruzzi's severance motion argues that because he is not named in the counts of the Superseding Indictment which charge drug-related offenses and because it is not alleged that he was involved in any drug-related conspiracy or conduct, "clearly, it would be enormously prejudicial to join [him] in a trial wherein drug activity is alleged." (Abruzzi's Motion for Severance at PP 3-6). At oral argument, Abruzzi's counsel stated that severance will prevent his client from being "disadvantaged unfairly" by the jury's contemplation of the drug charges brought against Merlino and possible association of said charges with Abruzzi.

The crux of Abruzzi's argument appears to be that the jury will not have the capacity to compartmentalize the evidence adduced against Merlino. Nevertheless, there is neither evidence before the Court that Abruzzi [*30] will suffer substantial prejudice as a result of joinder nor is there substantive argument that the jury will be unable to compartmentalize the evidence adduced at trial. Moreover, as Abruzzi was jointly indicted with his co-defendants and jointly charged with participating in the same conspiracy, the public interest in judicial economy favors joinder. Indeed, the Government alleges that during the drug conspiracy, it taped numerous conversations in which Abruzzi, Merlino, and Gambino talk about continuing thefts. (See Tr. at 26, l. 4-6). Severance is inappropriate as drug trafficking and the theft and sale of merchandise are alleged to be criminal acts performed in furtherance of the Enterprise, the evidence that may be introduced at trial is intertwined as to both drug trafficking and the theft and sale of merchandise, and a joint trial will serve the complementary interests of judicial economy and the preservation of prosecutorial resources.

C. Gambino's Motion for Severance

Gambino's severance motion argues that because the RICO theft-related charges against him and his co-defendants are joined with Merlino's drug-related charges, and "drug trafficking is viewed [*31] as taboo by society," the combination of allegation in a single indictment "may prove lethal for" him. (See Gambino's Mot. for Sever. at PP 3-4). Gambino further argues that no logical or temporal connection exists between the drug trafficking charges and the RICO theft-related charges. (See Gambino's Mot. for Sever. at P 5). He then argues that the Government's strategy is to convict him on the basis of "guilt by association." (See Gambino's Mot. for Sever. at 2).

There exists both a temporal and logical connection between the drug and RICO charges. Government counsel stated "there clearly is [such a relationship]. At the same time and we have the same tapes when they're talking about drugs, they're talking about stolen property." (Tr. at 29, l. 12-17). The Government also stated that some of its tapes talk about "both theft and drugs. And that [the Government] is looking at judicial economy, the same tapes on a number of occasions are to be played for drugs, for theft, and also to prove the Enterprise." (Tr. at 26, l. 11-14). Additionally, the Government alleges that during the drug conspiracy, it taped numerous conversations in which Abruzzi, Merlino, and Gambino [*32] talk about continuing thefts. (See Tr. at 26, l. 4-6).

At oral argument, Gambino's counsel referenced United States v. Eufrasio, 935 F.2d 553 (3d Cir. 1991), for the proposition that a court's decision on whether to grant a party's severance motion should be informed by "the quantity and limited admissibility of the prejudicial evidence." (Tr. at 16, l. 20-24). While his counsel claimed that there are over two hundred tapes that deal only with the drug charges against Merlino, the Government countered counsel's argument by challenging both the number of tapes referenced by counsel and the content of those tapes. As stated above, the Government argues that many of its tapes discuss drugs, theft, and the Enterprise. Therefore, counsel's argument that the Court's decision should be tempered by the quantity and limited admissibility of the prejudicial evidence is unavailing. The Court also finds unpersuasive Gambino's argument as it ignores two instructive statements of the Third Circuit: (1) that "prejudice should not be found in a joint trial just because all evidence adduced is not germane to all counts against each defendant;" and (2) that "neither disparity [*33] in evidence, nor introducing evidence more damaging to one defendant than others entitles seemingly less culpable defendants to severance." Id. (citations omitted).

D. Accardo's Motion for Severance

Accardo's motion argues that there exists no temporal or logical relationship between the drug related charges which stem from Merlino's alleged drug-related activities in 1999 and the RICO theft-related charges which allegedly took place in 1997 and 1998. (Accardo's Motion for Severance at PP 3-4). He argues that to include him in an indictment that contains unrelated drug charges is fundamentally unfair and inappropriate and cites United States v. Giampa, 904 F. Supp. 235 (D.N.J. 1995), in support thereof. (Accardo's Motion for Severance at P 6).

In Giampa, several defendants argued for severance in a case in which they were each charged with violating RICO. Id. at 266. The defendants argued, inter alia, that they would be prejudiced by the "spillover effect" created by a single trial of all defendants because "the jury would be unable to compartmentalize the evidence against them while evidence was presented which implicated [*34] their co-defendants." Id. The court concluded, however, that the defendants "did little more than make conclusory allegations of prejudice, and, accordingly, failed to meet their burden of pinpointing clear and substantial prejudice which would result from a joint trial." Id. In Giampa, severance was not granted to a single defendant.

Accardo does not distinguish or, indeed, discuss Giampa whatsoever in his motion or in a memorandum of law. The Court is therefore perplexed by Accardo's citation of Giampa. Indeed, the Giampa court's reasoning for denying severance seems ideally suited to the reasons this Court should deny Accardo's severance motion as he, like the Giampa defendants, has not met his "heavy burden" of "pinpointing clear and substantial prejudice" which would justify severance. See id. at 265 (citation omitted); see also Eufrasio, 935 F.2d at 568.

E. Frangipani's Motion for Severance

Frangipani argues that "there is no relationship whatsoever between [Merlino's] drug-related charges which occurred in 1999 . . . and the theft charges [which relate to him] involving receipt of stolen goods [*35] which occurred in different years." (Frangipani's Motion for Severance at P 4). He continues that "there is no allegation whatsoever that [he] was involved in any drug-related conspiracy or conduct which would warrant his inclusion in the Merlino conspiracy." (Frangipani's Motion for Severance at P 4). He concludes that it will be enormously prejudicial to join [him] in a trial wherein drug activity is alleged." (Frangipani's Motion for Severance at P 6).

As to his argument that there is no relation between the drug and RICO charges contained in the Superseding Indictment, Frangipani ignores the fact that he, Merlino, and the other co-defendants are joined in a RICO conspiracy and that "a RICO conspiracy charge provides [the] required link" to make joinder lawful and appropriate. Id. at 567. Moreover, because the criminal acts charged against Frangipani are alleged to have been undertaken in furtherance of a commonly charged racketeering enterprise and conspiracy," there exists a common link such that all charges are related under the umbrella of RICO. Eufrasio, 935 F.2d at 567. Most importantly, however, Frangipani ignores the Government's [*36] statement (or was unaware) that Luisi will "identify Frangipani as an associate of Merlino and will testify that Frangipani traveled to Boston and picked up a sum of money for Merlino which Luisi was loaning to Merlino." (Tr. at 28 l. 9-12).

As to meeting the "heavy burden" of showing that he will be prejudiced by joinder, Frangipani, like the other defendants, resorts to a single unsupported assertion. As such, Frangipani does not convince the Court that he will be prejudiced by a joint trial such that severance is appropriate.

IV. CONCLUSION

Prejudice is the touchstone of a Rule 14 motion for severance. While the denial of severance is committed to the sound discretion of the trial court, it is defendant's burden to demonstrate that clear and substantial prejudice will occur if a joint trial goes forward. None of the defendants in this matter met this burden. Moreover, each defendant's motion ignored Eufrasio, the seminal Third Circuit case on severance.

The similarity of Eufrasio to the instant case is striking. One similarity is that the allegation of a RICO conspiracy provides the necessary link whereby each defendant is brought within the fold of the [*37] Superseding Indictment. The Eufrasio court agreed with the Second Circuit's position that a RICO conspiracy charge provides the required link between the different charges such that joinder is appropriate. As alleged by the Government in its racketeering indictment, the purpose of the Enterprise was "to control, manage, finance, supervise, participate in and set policy concerning the making of money for the Enterprise through legal and illegal means." Ultimately, the circumstance presented to the Court is one in which money was made illegally through the auspices of the racketeering enterprise--the Philadelphia LCN. This factual circumstance is much like the factual circumstance that was before the Eufrasio court.

A second analogy that may be drawn between this case and the Eufrasio decision is the importance of compartmentalizing the evidence adduced and the trial court's ability to draft limiting instructions to lessen the likelihood of prejudice. The Court is confident that just as the trial court did in Eufrasio, it can fashion a limiting instruction that will reduce the probability that defendants Gambino, Accardo, Abruzzi, and Frangipani will be prejudiced by [*38] Merlino's alleged involvement in a drug conspiracy. Indeed, the Court's belief is buttressed by the fact that the trial court in Eufrasio successfully fashioned such an instruction, although the threat of prejudice was arguably greater in that case as one defendant was charged with murder.

A third similarity between this case and Eufrasio is the timing of the offense committed by one indicted defendant (i.e., Merlino's drug charges and the murder charge in Eufrasio) and the allegedly prejudicial effect that said offense will have on the other co-defendants. In Eufrasio, the murder occurred early in the conspiracy, well before the other co-defendants were involved and then the other crimes were charged. In this case, however, the drug conspiracy and the theft conspiracy allegedly occurred simultaneously. The Government alleges it has a tape recorded conversation in which the drugs and the thefts are discussed as late as March 25, 1999. Additionally, during the drug conspiracy there are numerous conversations wherein Merlino, Abruzzi, and Gambino are recorded talking about continuing thefts. Accordingly, the Court is to hear the same tapes on a number of occasions when [*39] evidence is being presented concerning drugs, theft, and the existence of the Enterprise. As the same tapes will be heard repeatedly, a single trial for all the defendants and all the counts brought in the Superseding Indictment is desirable for, inter alia, the reason of judicial economy.

Furthermore, in the interest of judicial economy, the Court will also hear some witnesses testify as to drugs, theft, and/or the existence of the Enterprise. For example, Ron Previte will allegedly testify as to drugs, thefts, and the RICO Enterprise. Mike McGowan will allegedly testify as to drugs and the RICO Enterprise. Fred Angelucci will allegedly testify as to thefts and the RICO Enterprise. Most importantly, however, is Luisi's testimony as he will allegedly testify extensively as to drugs, thefts, and the existence of the Enterprise.

Indeed, Luisi will allegedly testify that Merlino is the Acting Boss of the Philadelphia LCN, that Merlino inducted him into the Philadelphia LCN (i.e., designated him a "made" member of the LCN), and that Merlino made him a captain in the Philadelphia LCN. He will also testify that the Philadelphia LCN generated money through a number of illegal activities [*40] including trafficking in drugs and stolen property. Luisi will also testify that Merlino authorized him to distribute cocaine and that he and Merlino conspired to receive and possess stolen property. Luisi will allegedly also testify that Frangipani, as an associate of Merlino, traveled to Boston to pick-up $ 15,000.00 which Luisi loaned to Merlino. Therefore, in light of the foregoing, it is prudent and judicious for the Court to uphold the joinder of defendants Merlino, Gambino, Accardo, Abruzzi, and Frangipani.

It is the Court's position that Eufrasio is controlling on the issue of severance and that the instant case fits directly within Eufrasio. Indeed, both cases concern the same Enterprise--the Philadelphia LCN. It is also the Court's position that the "spillover effect" predicted to occur in this case due to Merlino's drug charges are far less prejudicial than the "spillover effect" occasioned by the murder charge in Eufrasio. It is also the Court's position that the jury will have the ability to compartmentalize the evidence presented and that this Court will fashion limiting instructions that will enhance the jurors' ability to effectively compartmentalize the [*41] evidence in the record. Indeed, at the time that testimony about drugs is being heard, the Court will have the ability to caution the jurors that they are to consider such testimony only when deliberating on the charges brought against Merlino. It is also clear to the Court that a temporal relationship exists between the drug and theft charges. Finally, it is the Court's position that there is no case law which supports the positions taken by the defendants in the their motions to sever. Accordingly, each severance motion before the Court is denied.

An appropriate Order follows.

ORDER

AND NOW, this 16th day of March, 2000, upon consideration of the severance motions of Joseph Merlino ("Merlino") (Docket No. 64), Frank Gambino ("Gambino") (Docket No. 99), Ralph Abruzzi ("Abruzzi") (Docket No. 98), Anthony Accardo ("Accardo") (Docket No. 101), and Steven Frangipani ("Frangipani") (Docket No. 110), Merlino's Supplemental Letter Brief in Support of Severance (Docket No. 114), the Government's Response Opposing Defendant Merlino's Motion for Severance Under Rule 14 of the Federal Rules of Criminal Procedure (Docket No. 82), the Government's Consolidated Response Opposing Motions [*42] for Severance Filed by Defendants Gambino, Abruzzi, and Accardo (Docket No. 106), the Government's Supplemental Response Opposing Defendants Merlino's, Abruzzi's, and Accardo's Motions for Severance Under Rule 14 of the Federal Rules of Criminal Procedure (Docket No. 108), the Government's Response Opposing Motion for Severance Filed by Defendant Steven Frangipani (Docket No. 109), and the Government's Response to Supplemental Letter Brief Filed in Support of Defendant Merlino's Motion for Severance Under Rule 14 of the Federal Rules of Criminal Procedure (Docket No. 115), IT IS HEREBY ORDERED that:

(1) Merlino's Motion for Severance (Docket No. 64) is DENIED;

(2) Gambino's Motion for Severance (Docket No. 99) is DENIED;

(3) Abruzzi's Motion for Severance (Docket No. 98) is DENIED;

(4) Accardo's Motion for Severance (Docket No. 101) is DENIED; and

(5) Frangipani's Motion for Severance (Docket No. 110) is DENIED.

BY THE COURT:

HERBERT J. HUTTON, J.

13 of 14 DOCUMENTS

United States of America v. Anthony Joseph Accardo, Defendant.

No. 60 CR 189.

U.S. District Court, No. Dist. Illinois, East. Div.

1960 U.S. Dist. LEXIS 4644; 61-1 U.S. Tax Cas. (CCH) P9197; 7 A.F.T.R.2d (RIA) 1323

11/18/60.

OPINIONBY:

HOFFMAN

OPINION:

Charge to the Jury

HOFFMAN, District Judge: THE COURT: Ladies and gentlemen of the jury: Let me first express my deep and appreciative thanks for the service which you have rendered during the many weeks of this trial. The trial in this case has covered a lengthy period of time, pretty nearly nine weeks, longer than most trials, shorter than some, and unfortunately for those of you who have business and household responsibilities, the trial has run five weeks beyond the regular period of jury service which, as you know, is generally one month.

Despite the length of the trial, however, I have observed that all of you, each and every one of you, have been most attentive, alert and punctual during these many arduous days, and I am confident that you will complete your remaining responsibilities here as jurors in the [*2] best traditions of our Federal Courts.

I believe that to the man or woman who performs his duties well, jury service is a gratifying one, and I think that after you have been discharged from your final responsibilities here, you will look back on your service in this case as a truly memorable experience.

As you know, ladies and gentlemen of the jury, it is my duty now to charge and instruct you with respect to the law which you will apply to the facts as you find the facts to be from the evidence which has been offered and admitted in this case. By evidence, I mean the spoken testimony of the various witnesses given from that witness stand as well as the documentary and physical exhibits which have been admitted into evidence.

These instructions which I am obligated to give under the law are for your benefit and guidance in considering the evidence and also for assistance to you in your deliberations upon this case.

You remember I told you in substance when you were being examined to determine your qualifications to serve as jurors in this case that the instructions which the Court would give insofar as they pertained to the principles of law applicable to this case must [*3] be accepted by you as a binding control and guide in your consideration of the evidence and in your deliberations, and I so instruct you now.

You will recall that preliminary to your being sworn to act as jurors in this case, you were examined not only by the Court, but by the lawyers as to your competency and qualifications to serve as jurors in this case.As part of such examination, each of you answered all questions put to you by the Court and counsel. Your answers showed that you were competent and qualified to act as jurors. The answers you then made to such questions in regard to your competency and qualifications, your fairness, your lack of prejudice and freedom from passion and sympathy are as binding on you now as they were then and should so remain until you are finally discharged from further consideration of this case. It would be improper and unlawful for any of you to disregard the answers that rendered you competent to serve as jurors in this case.

You will remember that I told you during my examination of you prior to your selection as jurors that it is your responsibility to determine what the facts are in the case. It is your exclusive function under the [*4] law and as the Court may give the law to you uninfluenced by any expression of opinion that the Court may have made or may hereafter make with respect to any matters of fact. I say to you that the Court has not intended at any time during the trial and does not intend now to express any opinion on any matter of fact. If by chance the court has expressed or does express any opinion on any matter of fact, you are at liberty to disregard such opinion and it is your duty to disregard it if it is different from your own.

Members of the jury, you will recall at the beginning of this trial I instructed and ordered you to refrain from talking with anybody about this case. I also instructed you not to permit anyone to speak with you about it. I also directed and ordered you not to read any articles about the case that might be printed in the newspapers concerning it, and from listening to anything that might be said over the radio or television about it. I assume that as jurors you have complied with the orders of the Court in this regard.

You are instructed that you are to decide this case only upon the evidence, oral evidence given from that witness stand, documentary or physical [*5] exhibits which were admitted in open court, and if by any chance you have heard, read or observed anything concerning the case other than hearing or seeing it in court, you must disregard what you have heard or seen and decide this case solely upon the evidence admitted in open court under the instructions pertaining to the law now being given to you.

I don't think that I need say at this point that this is a so-called criminal case in that a defendant is being charged here in an indictment with the commission of certain offenses, and the law in such cases is that the defendant comes into court presumed to be innocent, and that presumption protects him until such time, if such time shall come, when the jury shall believe from the evidence in the case beyond a reasonable doubt that the defendant is guilty as charged in the indictment.

The guilt of the accused, Mr. Accardo, is not to be inferred because the facts proved are consistent with his guilt, but, on the contrary, before there can be a verdict of guilty, you must believe from all the evidence and beyond a reasonable doubt that the facts proven are inconsistent with the defendant's innocence. If two conclusions can reasonably [*6] be drawn from the evidence, one of innocence and one of guilt, you should adopt the conclusion of innocence.

The defendant on trial, Mr. Accardo, has pleaded not guilty.The law does not require any defendant to prove his innocence. The burden of proving the charges in the indictment rests upon the government. You cannot find the defendant guilty unless from all the evidence you believe him guilty of the charges in the indictment beyond a reasonable doubt. Nothing is to be presumed or taken by implication against the defendant. The law presumes him innocent until he is proven guilty by competent evidence, and if the evidence you have in this case leaves in your mind any reasonable doubt of the guilt of the defendant, the law makes it your duty to acquit him.

Now I have used the words "reasonable doubt" here, and we have heard the expression mentioned by the lawyers during the trial. What is a reasonable doubt? A reasonable doubt is what the term implies, a doubt founded upon reason. It does not mean every conceivable kind of doubt; it does not mean a doubt that may be purely imaginary or fanciful or one that is merely speculative. It means, members of the jury, simply an [*7] honest doubt that appeals to reason and is founded upon reason. If, after considering all the evidence in this case, you have such a doubt in your mind as would cause you or any other reasonably prudent person to pause or hesitate before acting in a grave transaction of your life, then you have such a doubt as the law contemplates as a reasonable doubt.

You have heard today some discussion by the lawyers in respect to the truth or falsity of the testimony of certain witnesses. If you believe from the evidence that any witness in this case took that witness stand and knowingly and wilfully testified falsely during this trial to any matter material to the case, or, as we sometimes say, material to the issues, you are at liberty to disregard the entire testimony of such witness except as it may have been corroborated by other credible evidence or by facts and circumstances proved on the trial.

Your verdict in this case must be reached from all the evidence in the case, but if any evidence was admitted and was later stricken out by the Court, you must wholly disregard that evidence as was stricken out.On ocassions, you will remember, during the trial witnesses made answers to questions [*8] before the Court had an opportunity to rule on objections which were made. After such objections were sustained, if they were sustained, the Court directed the answers to be stricken from the record and that the jury disregard such answers; and I now again instruct you to disregard answers which were given in such circumstances.

You have heard the word "circumstantial" used here during this trial. There are two kinds of evidence, direct evidence and circumstantial evidence. There have been both kinds of evidence introduced during this trial. Direct evidence is that sort of evidence by which a fact is proved directly and without inference of other facts, and it is usually given by witnesses who saw, heard or otherwise observed some particular fact or occurrence. Circumstantial evidence is indirect evidence or that sort of evidence by which an inference of an unknown fact is drawn from the evidence of known facts. Circumstantial evidence in criminal cases is the proof of such facts and circumstances connected with or surrounding the crime or crimes charged as tend to show the guilt or innocence of the party charged.

If the facts and circumstances as shown by the evidence [*9] in this case are sufficient to convince you of the guilt of the defendant beyond a reasonable doubt, then such evidence is sufficient to authorize you to find the defendant guilty. The law requires a conviction where there is sufficient legal evidence to show a defendant's guilt beyond a reasonable doubt, and circumstantial evidence is legal evidence.

Of course, if you find there is no such evidence or any other kind of evidence which I am giving to you, then in that event you must find the defendant not guilty.

You have a right, ladies and gentlemen of the jury, to weigh and examine the evidence closely and carefully in the light of common knowledge and experience of mankind.You have the right to take into consideration the common knowledge and experience of mankind in determining whether any evidence is reasonable or unreasonable or probable or improbable in determining what weight it is entitled to receive.

Let us now consider the indictment in this case.

The indictment was filed and returned in this court by a Federal Grand Jury of this District on April 26, 1960. The indictment contains three separate counts.

Count one reads as follows, substantially:

That on [*10] or about March 20, 1957, in the Northern District of Illinois,

ANTHONY JOSEPH ACCARDO

defendant herein, did unlawfully, wilfully and knowingly make, and subscribe a document which contained a written declaration that it is made under the penalties of perjury, and which said defendant did not believe to be true and correct as to every material matter, in that the said Anthony Joseph Accardo, on or about March 20, 1957, made, subscribed, and filed, and cause to be made, subscribed, and filed at Chicago, Illinois, with the District Director, Internal Revenue Service, United States Treasury Department, a document, to-wit, 1956 U.S. Individual Income Tax Return, U.S. Treasury Department Internal Revenue Service Form 1040 (a true and correct copy of which document is attached hereto and made a part of this indictment), in which document defendant stated in substance, that during the tax year 1956 he was employed by Premium Beer Sales, Inc., and paid the sum of $42,862.25, and that while so employed 80 per cent of the automobile expenses involved in the operation of a certain Mercedes Benz automobile were incurred by him in promoting beer sales for the said Premium Beer Sales, Inc., whereas [*11] the said defendant then and there well knew that this statement was not true and correct in that 80 per cent of the said automobile expenses were not incurred by him in promoting beer sales for Premium Beer Sales, Inc.: in violation of Section 7206, Sub-Section 1, Title 26, United States Code.

The next count in the indictment, ladies and gentlemen, is Count two, and that count reads substantially as follows:

That on or about April 15, 1958, in the Northern District of Illinois,

ANTHONY JOSEPH ACCARDO

defendant herein, did unlawfully, wilfully and knowingly make, and subscribe a document, which contained a written declaration that it is made under the penalties of perjury, and which said defendant did not believe to be true and correct as to every material matter, in that the said Anthony Joseph Accardo, on or about April 15, 1958, made, subscribed, and filed, and caused to be made, subscribed, and filed at Chicago, Illinois, with the District Director, Internal Revenue Service, United States Treasury Department, a document, to-wit, 1957 U.S. Individual Income Tax Return, U.S. Treasury Department Internal Revenue Service Form 1040 (a true and correct copy of which document [*12] is attached hereto and made a part of this indictment), in which document defendant stated, in substance, that during the tax year 1957 he was employed by Premium Beer Sales, Inc., and paid the sum of $67,540.85, and that while so employed 90 per cent of the automobile expenses involved in the operation of a certain Mercedes Benz automobile were incurred by him as an agent for Premium Beer Sales, Inc., whereas the said defendant then and there well knew that this statement was not true and correct in that 90 per cent of the said automobile expenses were not incurred by him as an agent for Premium Beer Sales. Inc.: in violation of Section 7206, Sub-Section 1, Title 26, United States Code.

The last count, Count three of the indictment, reads substantially as follows:

That on or about April 9, 1959, in the Northern District of Illinois,

ANTHONY JOSEPH ACCARDO

defendant herein, did unlawfully, wilfully and knowingly make, and subscribe a document, which contained a written declaration that it is made under the penalties of perjury, and which said defendant did not believe to be true and correct as to every material matter, in that the said Anthony Joseph Accordo, on or about [*13] April 9, 1959, made, subscribed, and filed, and caused to be made, subscribed, and filed at Chicago, Illinois, with the District Director, Internal Revenue Service, United States Treasury Department, a document, to-wit, 1958 U.S. Individual Income Tax Return, U.S. Treasury Department Internal Revenue Service Form 1040 (a true and correct copy of which document is attached hereto and made a part of this indictment), in which document defendant stated, in substance, that during the tax year 1958 he was employed by Premium Beer Sales, Inc., and paid the sum of $68,871.70, and that while so employed 90 per cent of the automobile expenses involved in the operation of a certain Mercedes Benz automobile were incurred by him as an agent for Premium Beer Sales, Inc., whereas the said defendant then and there well knew that this statement was not true and correct in that 90 per cent of the said automobile expenses were not incurred by him as an agent for Premium Beer Sales, Inc.: in violation of Section 7206, Sub-Section 1, Title 26, United States Code.

I might say at this point, ladies and gentlemen of the jury, that the tax returns which are referred to in the indictment, the 1956, 1957, [*14] and 1958 returns, have, you will remember, been admitted into evidence, and along with other exhibits will be sent to the jury room for you to inspect and examine.

While we are on the subject of the indictment, ladies and gentlemen, I must say to you that the indictment is not to be treated by you in any way as raising any presumption of guilt or creating any kind of prejudice against the defendant, Mr. Accardo. An indictment is one of the forms prescribed by law to prefer a charge against an individual and must be regarded by you in that light and no other light.

The Federal statute to which the indictment refers and which the defendant is charged with violating is Section 7206, Sub-Section 1, Title 26, United States Code. Insofar as it is pertinent here to this case, that statute reads as follows:

"Any person who wilfully makes and subscribes any return, statement or other document which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter... shall be punished as provided by law."

And the statute later details the punishment, among other things. [*15]

Now for a violation of this statute to occur, there must be:

1. A wilful making and subscribing of a return, statement or other document.

2. The return, statement or other document must contain a written declaration that it is made under the penalties of perjury.

3. The maker must not believe the return, statement or other document to be true and correct as to every material matter.

These are the three essential elements.

In this case the government charges that the false statements concerned - the alleged false statements concerned, consisted of:

1. The defendant's written claim that 80 per cent of his Mercedes Benz automobile expense for the tax year 1956 was incurred in the promotion of beer sales for Premium Beer Sales, Inc.

2. The defendant's written claim that 90 per cent of his Mercedes Benz automobile expense for the tax year 1957 was incurred as an agent of Premium Beer Sales, Inc.

3. The defendant's written claim that 90 per cent of his Mercedes Benz automobile expense for the tax year 1958 was incurred as an agent of Premium Beer Sales, Inc.

I have ruled as a matter of law that the Federal Income Tax Return, Forms 1040 and their attached addenda [*16] and schedules, returns, that is to say, made and subscribed by the defendant in this case for the years 1956, 1957 and 1958, if you find such documents were made and subscribed by the defendant, are returns as contemplated - are returns and documents as contemplated by Section 7206, Sub-Section 1, Title 26, United States Code.

I have also ruled as a matter of law that the statements made by the defendant in this case, if you find such statements were made, were of such a material matter as is contemplated by Section 7206, Sub-Section 1, Title 26, United States Code.

Inasmuch as it is your duty as jurors to follow the law as stated in the instructions of the Court, you need not and should not concern yourselves to any further degree with these matters of law. It remains, therefore, for you, ladies and gentlemen of the jury, to concern yourselves solely with the following questions of fact:

1. Whether the returns in question were made and subscribed by the defendant.

2. Whether the defendant, if he made and subscribed these returns, acted wilfully at the time of making and subscribing.

3. Whether the defendant, if he made and subscribed these returns, believed the alleged [*17] false statements to be true and correct as to every material matter.

Members of the jury, a necessary element of the crimes charged in this indictment is the intent to commit such crimes. Intent may be proved by direct or circumstantial evidence or by a combination of both. I would say that intent can rarely be established by any means other than circumstantial evidence. While witnesses may see and hear and thus be able to give direct evidence of that a defendant does or fails to do.There can be no eye-witness account of the state of mind with which the acts were done or committed, but what a defendant does or fails to do may indicate intent or lack of intent to commit the offense charged.

In determining the issue as to intent, you are entitled to consider anything done or omitted to be done by the accused and all facts and circumstances in evidence which may aid in the determination of the state of mind. It is obviously impossible to ascertain or prove directly what were the operations of the mind of the defendant. You cannot look into a person's mind and see what his intentions are or were, but a careful and intelligent consideration of the facts and circumstances shown [*18] by the evidence in any case enables one to infer what another's intentions were in doing or not doing things.

With a knowledge of definite acts, we may draw definite logical conclusions. We are, in our affairs, continuously called upon to decide from the acts of others what their intentions or purposes are, and experience has taught us that frequently actions speak more clearly than spoken or printed words. You must, therefore, rely in part on circumstantial evidence in determining the guilt or innocence of the defendant.

Before the defendant can be found guilty under this indictment or any count thereof, it is incumbent upon the government to prove every material allegation in the indictment beyond a reasonable doubt. Nothing is to be presumed or taken by implication against the defendant.

It is your duty to consider all the evidence of both sides without regard to which side called the greater number of witnesses to the witness stand. I don't know at this time whether the government called the larger number of witnesses - at least I don't remember - than the defendant called, but consider all of the evidence of both sides, ladies and gentlemen, without regard to which [*19] side called the greater number of witnesses.

In the statute which I have been discussing, the statute upon which the indictment is based as well as the indictment itself, you will remember the words "knowingly and wilfully" are used, and, as I have said, in this case the matter of intent is an essential element which must exist in order for the accused, Mr. Accardo, to be criminally liable.

Therefore, in order to find the defendant guilty, you must not only believe that he did the acts complained of and of which he stands charged, but you must also believe that the acts were intentionally and knowingly done, or, rather, the acts were intentionally and knowingly done by him. The word, "knowingly," as used in the statute and as set forth in the indictment, means that state of mind wherein the defendant was in possession of facts from which he knew or was aware that he could not lawfully act or commit the acts whereof he now stands charged.

"Wilfully," the word, "wilfully," ladies and gentlemen, means intentionally and not by accident.

We have heard the subject of the credibility of witnesses discussed here today - perhaps before today.

I say to you, ladies and gentlemen [*20] of the jury, that you are the sole judges of the credibility of the witnesses and the weight to be given to the testimony of the witnesses who have testified here upon this trial. In weighing the testimony of each witness, you should carefully scrutinize it; consider all of the circumstances under which the witness testified; his or her demeanor on the witness stand; the manner in which he or she might be affected by the verdict; the extent to which he or she is corroborated or contradicted by other credible evidence, and, in short, any circumstances that tend to throw light upon his or her credibility; and, in applying these tests which I have just outlined, it is for you to determine the weight which is to be given to the testimony of each witness.

One of the methods of impeaching or impairing the testimony of a witness is to show that on a material point he has made other, or different, or conflicting statements at some other time or on some other occasion, and this is one of the matters you should take into consideration in determining the credibility of any witness.

There has been some talk about gambling in various aspects in this case. Evidence of gambling activity by [*21] certain witnesses has been admitted. While such evidence does not impeach these witnesses, it may be considered by you in reaching a conclusion in respect to the credibility of the witness.

There is a statute of the United States which reads, so far as pertinent here, as follows:

"In the trial of all persons charged with the commission of offenses against the United States * * * the person charged shall, at his own request, be a competent witness. His failure to make such a request shall not create any presumption against him."

Mr. Accardo has not testified here. The failure of Mr. Accardo, the defendant, to take the witness stand and testify in his own behalf does not create any presumption against him.

You are instructed that you must not permit that fact to weigh in the slightest degree against Mr. Accardo, nor should this fact enter into your discussions or deliberations in any manner.

You will remember that the government, through its witnesses Harry Kandell and Arthur Hill, and the defendant, through the witness Gordon Winston, offered written summaries and testimony concerning computations prepared by them from exhibits previously received in evidence. The summaries [*22] and testimony concerning these computations were offered and are to be considered by you only as an explanation by the witnesses Kandell, Hill and Winston as to what the exhibits previously admitted into evidence show. Those exhibits are controlling, and the testimony of the witnesses Kandell, Hill and Winston pertaining to the computations made by them are to be considered by you merely as a matter of your convenience.

Adverting for a moment to the subject of intent again, I must say to you that the intent required to be proved in order to convict the defendant of the offenses charged in the indictment is the intent of the defendant to wilfully make a knowingly false statement on his 1956, 1957, and 1958 Federal Income Tax Returns, Form 1040, or on any one of them, and I repeat, in substance, that the word "wilfully" means knowingly and intentionally, done with corrupt design or purpose.

Now whether or not an act is done wilfully is a fact which must be determined by reasonable inference established from the facts proved by the evidence. You cannot look into the defendant's mind or open up his head to look and see what his intention was when he allegedly made the statements [*23] in question on his 1956, 1957 and 1958 Federal Income Tax Returns. But a careful and intelligent consideration of the facts and circumstances which you find to be proved in the evidence will, I think, enable you to decide what the defendant's intention or intentions were.

You may find from the fact that the defendant signed his income tax returns for the years 1956, 1957, and 1958 that he had knowledge of the contents of his returns.

A defendant may not sign and file a false return - or, I should say, a taxpayer may not sign and file a false return and escape punishment by disclaiming knowledge of what he has sponsored.

Of course he would not be liable for innocent clerical mistakes, but he must be held to know that which it is his duty to know, and it is for you to determine from all the evidence whether the defendant had knowledge of the alleged falsity of the matters set forth in these returns.

Now the word "subscribes" simply means the signing of one's name to a document. During the trial you have seen Federal Income Tax Returns, Forms 1040, for the years 1956, 1957, and 1958, they are in evidence, each bearing the signature Anthony Joseph Accardo.

The fact that [*24] an individual's name is signed to a return shall alone be sufficient evidence, until evidence to the contrary is introduced, that the return was actually signed by him.In other words, in the absence of evidence to the contrary, the fact that the signature "Anthony J. Accardo" appears on the tax returns in issue in this case creates a presumption that Anthony J. Accardo, the defendant in this case, actually did sign these returns, and that you may so find without further proof.

I have ruled as a matter of law that the U.S. Individual Income Tax Returns, Forms 1040, together with their attached addenda and schedules for the years as I indicated before, 1956, 1957, and 1958, and which have been admitted into evidence, are returns, are tax returns, and are documents within the meaning of 7206(1), Title 26 of the United States Code.

Now you will recall, ladies and gentlemen of the jury, that the defendant's income tax returns for the years 1940 through and including 1955 were admitted into evidence, although the defendant is not charged in this indictment with having committed any offense with reference to these returns. I say in respect to these documents, witnesses have testified [*25] to events occurring prior to 1956, 1957, and 1958, which, as you know, are the years involved in this indictment. By this I mean to refer to the testimony relating to the nature and source of the items of income appearing in defendant's income tax returns from 1940 through 1955. I also refer to the testimony which you have heard concerning two letters sent to the defendant by the Internal Revenue Service, one in February of 1954 and the other in October of 1955.

The theory upon which this evidence was admitted is that it may bear upon the intent of the defendant. Evidence of this nature, ladies and gentlemen of the jury, is only admissible where motive, intent or wilful conduct is in issue, such as it is in this case. You are to consider this evidence only on the issue of motive, intent and wilful conduct, and only insofar as the charges in the three counts of the indictment are concerned. You must disregard such evidence for all other purposes and keep in mind that the defendant is on trial only upon the charges set out in the three counts of the indictment which I summarized to you earlier in my charge. I caution you that the defendant is not charged with having violated [*26] the income tax laws for any years other than for the three years charged in the indictment, namely 1956, 1957, and 1958.

Grand jury minutes were used in the questioning of certain witnesses. You may consider in that connection only those questions and answers insofar as they may have tended to impeach the witness in question. You shall not consider them as evidence that any of the facts that were recited were true.

We have on the law books what is known as Section 2 of Title 18 of the United States Code which deals with crimes and criminal procedures. That provides as follows:

"(a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.

"(b) Whoever wilfully causes an act to be done which, if directly performed by him or another, would be an offense against the United States, is punishable as a principal."

You will have occasion to consider that statute in your deliberations.

The lawyers, during the trial, in their opening statements, and while they were arguing on objections to question, objections to the introduction of evidence, made certain statements. Of course, [*27] their final arguments contained many statements. Some of the statements, you will recall, made by one lawyer were disputed by the other lawyer. I say to you as a matter of law that the statements of the lawyers in the case are not evidence.

Now I think all of you observed during this trial that it became the duty of the lawyers for both sides to object to questions or to object to the introduction of evidence. You shall not take into consideration against either party such objections, or the number of them, nor permit yourselves to be in any way influenced by such objections against either party that may have made them.

There has been some talk here during the trial, some discussion about the amount of money involved in this case.In reaching your verdict as to the guilt or innocence of Mr. Accardo, the defendant, you are instructed that whether or not the government has suffered pecuniary or monetary loss as a result of the alleged false statements, or the amount of such loss, if any, is not an element of the offense or offenses as charged in the three counts of the indictment, and such pecuniary or monetary loss, if any, should be considered by you only in regard to the possible [*28] light it may shed upon the motive of the defendant in this case.

During the course of a trial, I occasionally asked questions of a witness in order to bring out facts which I considered were not fully and adequately brought out during the testimony of the witness. I did that on a few occasions during this trial, but I instruct you that you must not assume that I hold any opinion on the matter or matters to which my questions related. Remember at all times that you as jurors are at liberty to disregard all comments of the Court in arriving at your own findings of the facts.

Now, ladies and gentlemen, there was some reference to punishment, possible punishment, by the lawyers, some of the lawyers - one or more of the lawyers - during the discussions today. I say to you that it is your duty to tell the Court by your verdict whether or not the defendant is guilty or not guilty on the one or more counts of the indictment - on one or more of the three counts of the indictment. Under no circumstances are you to consider the matter of punishment. Under the law, that is a matter committed to the attention of the Court alone.

Also you must consider each of the statements which [*29] I have made here in this charge, not merely in itself, but as related to all other points covered by the charge. In other words, you must consider what I have said here by way of instructions, ladies and gentlemen of the jury, as a whole.

Now when you retire to the jury room, I shall send with you three forms of verdicts. If you find the defendant not guilty on all three counts of the indictment, you will sign this form of verdict:

"We the jury find the defendant Anthony Joseph Accardo not guilty as charged in the indictment," and the verdict will be signed by the foreman and the other 11 members of the jury.

If you find the defendant Anthony Joseph Accardo guilty on all three counts of the indictment, you will sign this form of verdict:

"We the jury find the defendant Anthony Joseph Accardo guilty as charged in the indictment."

A third form of verdict will go with you to the jury room and that is to be signed only in the event you find the defendant guilty on one and not guilty on two, or guilty on two and not guilty on one - on a third one, and in such instance, in instances such as those, if it comes to pass, if they come to pass, or if such an instance comes to pass, [*30] the jury will sign this form of verdict:

"We the jury find the defendant Anthony Joseph Accardo guilty as charged in Count -" then there is a blank form in the verdict where you will insert the count upon which the defendant is found guilty - " - of the indictment, and we find the said defendant not guilty as charged in Count -" - or if it is "Counts," you fill in the blank form there - "- of the indictment."

And, of course, any verdict will be signed by the foreman and the other 11 members of the jury.

* * *

Verdict

"The jury returns the following verdict. We, the jury find the defendant Anthony Joseph Accardo guilty as charged in the indictment."

Grover C. Richman, Jr., U.S. Atty., Newark, N.J., by Edward V. Ryan, Asst. U.S. Atty., Jersey City, N.J., for plaintiff.

In these proceedings plaintiff asks the revocation of defendant's naturalization 'on the ground of fraud or on the ground that such order and certificate of naturalization were illegally procured.' Title 8 U.S.C.A. Aliens and Nationality, Sec. 738(a). n1 Under the applicable statute petitioner, in the naturalization proceeding, as the spouse of a United States citizen residing in this country prior to filing his naturalization petition, must have been for two years prior thereto, and still be at the time of the hearing thereon, 'a person of good moral character, attached to the principles of the Constitution of the United States, and well disposed to the good order and happiness of the United States.' Ibid. Sec. 707, 711. The grounds alleged by plaintiff for revocation of such naturalization, of fraud, on the one hand, and of illegality, on the other, are based substantially on the fact that petitioner, both in his petition for naturalization and when questioned personally [**2] in that regard, while admitting certain difficulties with the law, failed to disclose a series of others, including both arrests and convictions, these showing that prior to his naturalization he had been frequently in conflict with the law enforcement authorities for some fifteen years.

More specifically, defendant, during naturalization, admitted his arrest for conspiracy in 1937 for a crime committed in Camden, N.J., in 1934, and his conviction therefor on November 6, 1941, for which he was given a two-year, suspended sentence, probation three years, $ 1,000 fine. He further admitted his arrest in New York City in 1933 for a narcotics violation, on which the complaint had been dismissed. But on the other hand, defendant told the Naturalization officials in these proceedings that the above constituted his sole criminal record. This was untrue. Defendant now admits it to be the fact that, in addition to the above arrests and conviction, he had also been arrested and convicted as follows:

1. On June 8, 1930 he had been arrested in Irvington, N.J. under the name of 'Sam Accardi', as a disorderly person, convicted of said charge, and fined $ 25.

2. On July 12, 1933 he had been arrested [**3] in Jersey City, N.J. under the name of 'Guiseppi Accarobi', as a disorderly person, convicted on said charge, and received a suspended sentence.

3. On September 24, 1940, in Newark, defendant had been arrested and convicted under the name of 'Sam Accardi', for failure to keep accurate records of wages and hours of his employees, for which he was fined $ 50. However, since the Government discovered this, no claim is made as to fraud in this regard, as distinguished from its bearing on illegality, as hereafter noted. Nor does the Government claim fraud because of the arrest of 'Sam Accardi' November 26, 1926 in Newark for assault and battery. For while defendant admitted this was he, there seems to be real question, if this was not an arrest of his cousin by the same name.

4. In addition to the above criminal record preceding the filing of his petition for naturalization, defendant was also arrested October 25, 1944, some months after his naturalization petition was filed, but before granting of the decree, on an indictment charging that from January 1, 1943 to September 30, 1943 he, with others, had conspired to defraud the United States of revenue through the operation of an unregistered [**4] still. Indeed, at the time he was naturalized defendant was still under bail on this charge.

Defendant states the reason he failed to [*785] disclose this arrest just before the decree, when questioned in regard to his arrest and conviction record, was because he had been advised by his lawyer that this indictment was to be dismissed as to him. However, when so questioned, not only was he still under bail, but the indictment against him remained in effect till July 7, 1945, some six months after he obtained his naturalization decree. While, for the above reason, he may not have considered this arrest a serious matter, he undoubtedly knew of it, and wilfully failed to disclose it. Had he disclosed it, unquestionably he would not have been naturalized at that time, for this reason alone. U.S. v. Palmeri, D.C.E.D. N.Y. 1943, 52 F.Supp. 226. So the materiality of this wilful nondisclosure is self-evident.

Defendant claims his 1933 conviction is a nullity because of an unreported decision in 1934 by the New Jersey Supreme Court in State v. Lanzetta, holding the 1933 Supplement to the Disorderly Persons Act invalid. But in the first place, defendant's conviction stands of record, [**5] unattacked. In the next place, the Lanzetta case applies solely to a supplement to the old Disorderly Persons Act, applicable to other offenses than loitering, whereas defendant was convicted of being a disorderly person here because of 'loitering'. And loitering is made an offense, not by the above invalid supplement, but by other sections of the Disorderly Persons Act, in effect long before the invalid 1933 Supplement, and still in effect. n2 Defendant further claims this conviction was known to the authorities when he entered this country the second time, at Montreal, several years earlier than his naturalization. But this information was never known to the Naturalization authorities, but only to the Department of State, which issued his visa, and to an entirely separate branch of the Immigration Office, having nothing to do with naturalization. The Naturalization authorities cannot be charged with notice of what they did not, in fact, know, when this fact was known only to such widely different branches of the Government. U.S. v. Riggins, 9 Cir., 1933, 65 F.2d 750; U.S. v. Depew, 10 Cir., 1938, 100 F.2d 725; Halverson v. U.S., 7 Cir., 1941, 121 F.2d 420.

Defendant further claims [**6] that, since all the above arrest and conviction data was known to the U.S. Probation Office, the U.S. Naturalization officials should be charged with notice of same, even though they did not know it in fact. This is on the tenuous theory that defendant's mere mention during the naturalization proceedings of the fact that he had been put on probation for an entirely different crime, put the Naturalization officials on notice of everything which all the files of the U.S. Probation Office, not the Naturalization Office, contained. If this contention were correct, then, since the Probation Office is an arm of this Court, this Court, which naturalized defendant, would, a fortiori, not have been at all misled by defendant's failure to disclose any arrest or conviction which appeared in its probation records. In short, when questioned as to his record, defendant need have disclosed nothing. This argument answers itself.

All the above, save the 1926 and 1940 records not relied on by plaintiff, go to the question of defendant's fraud as grounds for the revocation of his naturalization. Thus we find that the Naturalization court had before it, not a man who had had but a single conviction, [**7] and another arrest as it supposed, but a man who had frequently been in trouble with the authorities over the course of some fifteen years prior to the time of his naturalization. It was defendant's duty to disclose an arrest, as well as a conviction, in order that the Government might investigate before granting the decree. Gaglione v. U.S., 1 Cir., 1929, 35 F.2d 496, In re Paoli, D.C. Cal. 1943, 49 F.Supp. 128. That defendant's wilful failure to disclose this situation to the authorities had a material effect upon the action of the Naturalization officials and the Court in its decision to grant the decree, is undoubted. Particularly is this the case, since even the limited disclosures [*786] of the defendant were not passed on by the immigration officials, even tentatively, but referred to the Court for its own decision thereon.

We turn now to the question of illegality, i.e., whether the naturalization certificate was procured illegally, in that the defendant, for two years prior to filing his naturalization petition, and through the time of his obtaining his decree, had not been 'a person of good moral character, attached to the principles of the Constitution of the United [**8] States, and well disposed to the good order and happiness of the United States.' First we bear in mind that it was during this period that defendant wilfully concealed from the governmental authorities his above arrests and convictions, which obviously had such a material bearing upon the Court's determination to grant him his naturalization decree. These fraudulent acts per se revealed his character as that of one willing to defraud others, even including the parens patriae, for his own ends. Since we here consider defendant's character only, defendant's contentions as to notice to the Government as to some of this record becomes irrelevant, even if this contention were not fallacious. It is too clear for argument that the above fraud of itself shows defendant was not then of good moral character, attached to the principles of the Constitution of the United States, and well disposed to the good order and happiness of the United States.' Del Guerico v. Pupko, 9 Cir., 1947, 160 F.2d 799, 800; Stevens v. U.S., 7 Cir., 1951, 190 F.2d 880; Gaglione v. U.S., supra. How can a person claim to be of 'good moral character' or 'well disposed to the good order and happiness of the United States' [**9] at the very time he is seeking to defraud the United States, in a matter of moment both to him and to the country?

In addition thereto, defendant was convicted June 1, 1951, after his naturalization, in the United States District Court for the Southern District of New York, on his plea of guilty to conspiring to operate an unregistered still from February 1, 1943 to January 5, 1944. That this was a serious offense may be judged from the fact that his conviction resulted in his being sentenced to prison for a year and a day, a sentence which he served, and that he was also fined the sum of $ 5,000. Defendant has thus admitted on the record, that for a period of almost a year, and up to within three weeks of the day he filed his petition for naturalization, he had been engaged in a conspiracy to defraud the United States. How can such actions be deemed consonant with being 'a person of good moral character, attached to the principles of the Constitution of the United States, and well disposed to the good order and happiness of the United States'? U.S. v. Palmeri, supra, (52 F.Supp. 227); In re Taran, D.C. Minn. 1943, 52 F.Supp. 535, 539.

This plea of guilty, entered in a proceeding [**10] between the United States Government and defendant, the very parties now before the Court, on the very same issue now before the Court collaterally, i.e., his guilt of such conspiracy, obviously constitutes an estoppel of record, which he cannot now be heard to deny, else there would be no end of litigation. Local 167 of International Brotherhood of Teamsters, Chauffeurs, Stablemen & Helpers of America, v. U.S., 1934, 291 U.S. 293, 54 S.Ct. 396, 78 L.Ed. 804; Emich Motors Corp. v. General Motors, 1950, 340 U.S. 558, 568, 71 S.Ct. 408, 95 L.Ed. 534; U.S. v. Bower, D.C.E.D. Tenn. 1951, 95 F.Supp. 19; U.S. v. American Packing, D.C.N.J. 1953, 113 F.Supp. 223; Restatement Judgments, Sec. 68 (1942). The few authorities cited to the contrary are actually not opposed to this rule. They are either cases of convictions in State courts, where the parties in the two proceedings are therefore not identic, as they are here, or where the original adjudication was an acquittal, not a conviction. In an acquittal, the failure of the Government to prove guilt beyond a reasonable doubt of course does not establish the fact that guilt may not exist by the greater weight of the evidence, the requisite burden [**11] in the subsequent civil proceeding. Hence there is no estoppel of record. On the other hand, where the result is a conviction, i.e., where guilt is established [*787] beyond a reasonable doubt, then, between the same parties, guilt has been established by the greater weight of the evidence, a fortiori.

Defendant finally claims that he could not have been expected to tell the Immigration authorities of any or all of this undisclosed criminal record and bad character, since to do so would have been violative of the Fifth Amendment. n3 The answer to this novel contention is clear. In the first place, defendant never was 'compelled' to be a witness against himself in the above regard at all. No one forced him to apply for naturalization. This action he took of his own choice. In the next place, as to the above conviction for which he was sent to prison for a year and a day, since the conviction itself occurred after his naturalization proceeding, obviously he was not even questioned in that regard, during such proceedings, and therefore was not compelled to testify during such proceedings in that regard. The proof in that regard comes not from his lips but from the records of the [**12] United States District Court for the Southern District of New York. Again, as to this preceding record, defendant disclosed that part which he chose. But, in doing so, he did not rely on the Fifth Amendment. Thereby he waive it. U.S. v. Thomas, D.C. Ky. 1943, 49 F.Supp. 547, 551; Tomlinson v. U.S., 1937, 68 App.D.C. 106, 93 F.2d 652, 656, 114 A.L.R. 1315, certiorari denied Pratt v. U.S., 303 U.S. 642, 58 S.Ct. 645, 82 L.Ed. 1107; U.S. ex rel. Vajtauer v. Com'r, 1927, 273 U.S. 103, 112, 47 S.Ct. 302, 71 L.Ed. 560; U.S. ex rel. Zapp v. District Director, 2 Cir., 1941, 120 F.2d 762, 764. Yet again, when Congress authorized aliens to become naturalized it offered this, the greatest gift in the power of the Government to bestow, upon certain conditions. One of these conditions was a full, frank disclosure of the applicant's character, including his criminal record. This gift he was to receive only upon compliance with that condition. When he applied for such gift, his application constituted his agreement to abide by such condition. In other words, when defendant applied for naturalization, he agreed to waive any right to rely upon the above provisions of the Fifth Amendment, in order to [**13] give the United States Government the information which Congress insisted was necessary in all naturalizations. That such constitutional provisions may be waived is settled law. U.S. v. Thomas, supra; Tomlinson v. U.S., supra; U.S. ex rel Vajtauer v. Com'r, supra; U.S. ex rel. Zapp v. District Director, supra; Raffel v. U.S., 1926, 271 U.S. 494, 499, 46 S.Ct. 566, 70 L.Ed. 1054.

The recent case of U.S. v. Kahriger, 1952, 345 U.S. 22, 32, 73 S.Ct. 510, involving a somewhat similar situation, is to the same effect.

It is thus clear that by reason of defendant's false statements and concealment of material facts relating to his criminal record, the decree of naturalization of defendant entered in this Court on or about January 22, 1945 was fraudulently procured.

It is further clear that, because of the defendant's false and fraudulent misrepresentations made to the Immigration authorities during the course of his naturalization proceedings, and because of the fact that immediately prior to the filing of his naturalization petition he had been engaged in a serious conspiracy to defraud the United States, defendant had not been, at and prior to naturalization, for the requisite period, [**14] 'a person of good moral character, attached to the principles of the Constitution of the United States, and well disposed to the good order and happiness of the United States.' Thus defendant's naturalization decree was illegally procured.

Therefore, both on the ground of fraud and on the ground that the order and certificate of naturalization of defendant were illegally procured, said order will be revoked [*788] and set aside and said certificate will be cancelled.

The facts herein stated and the conclusions of law herein expressed shall be considered the findings of fact and the conclusions of law required by Fed. Rules Civ. Proc. rule 52, 28 U.S.C.

n1. While these proceedings were initiated subsequent to the enactment of the McCarran Act on June 27, 1952, Chapter 477, Title 1, Sec. 101, 66 Stat. 166, 8 U.S.C.A. § 1101, the repealer and saving clauses of the McCarran Act provide that the instant proceedings shall be governed by the above proceeding act. Ibid. Sec. 403(b), 405(a), 407, 8 U.S.C.A. § 1101 note.

n2. Originally P.L. 1912, c. 114, Sec. 1, P.L. 1924, c. 173, Sec. 1, now N.J.S.A. 26A:170-30. [**15]

n3. '* * * nor shall be compelled in any criminal case to be a witness against himself'. U.S. Const. Amendment V.