CORE TERMS: conspiracy, rubin, indictment, kickback, forfeiture, juror, joint and several liability, variance, conduit, prosecutor, convicted, racketeering, ethnic, forfeiture provision, plea agreement, deliberation, furtherance, predicate, tampering, double jeopardy, prejudicial, extrinsic, forfeit, bias, severance, evidentiary hearing, co-conspirator, dummy, credibility, prejudiced
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HeadnotesCOUNSEL: For Appellant Caporale, Hugh B. Arnold, John J. Toomey, Charles A. Linn.
For Appellant Pilotto, E. David Rosen, Carl M. Walsh.
For Appellant Gopman, Ronald A. Dion.
For Appellant Giardiello & Rubin, Barry Fallick, Rochman, Platzer, & Fallick.
For Appellant Wuagneux, John C. Mattes.
For Appellant Tricario, Thomas Decker.
For Appellant Ostrer, Clifford B. Hark.
For Appellee, John M. Owens, William C. Bryson, Leon Kellner, U.S. Dept. of Justice.
JUDGES: Fay and Johnson, Circuit Judges, and Hoffman, * Senior District Judge.
* Honorable Walter E. Hoffman, Senior U.S. District Judge for the Eastern District of Virginia, sitting by designation.
OPINIONBY: JOHNSON
OPINION: [*1495] JOHNSON, Circuit Judge:
This [**2] is a consolidated appeal brought by eight defendants-appellants challenging their convictions pursuant to a one count indictment for conspiracy to violate the federal anti-racketeering statute (RICO). All eight appellants were officers of or somehow associated with the Laborers International Union of NOrth America ("the Union"). The government's theory of the case was that the defendants-appellants conspired to receive kickbacks from various insurance or health care service provider representatives in exchange for exercising their influence with the Union to obtain the Union's health and insurance benefits contracts for the companies paying kickbacks. n1 Appellants were convicted by a jury in the Southern District of Florida. We reject the numerous arguments the appellants advance on appeal and affirm the convictions.
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n1 The total amount of kickbacks paid during the scheme's seven year operation was over two million dollars.
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I. FACTS
The scheme began in 1970, when the Union's Chicago Local decided to [**3] institute a dental care program for its members. Representatives of the Local's Health and Welfare Fund, including Angelo Fosco n2 and appellant James Caporale, n3 arranged to give the contract to Consultants and Administrators, Inc. ("C & A"), a company with no clients, equipment, or experience. Defendant-appellant Alfred Pilotto n4 also helped get the contract for C & A. Angelo Fosco and Daniel Milano, Sr., an auditor with the Chicago Local, each owned 20% of [*1496] C & A's stock. n5 The Fund trustees did not know that Milano and Fosco had an interest in C & A.
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n2 Fosco was vice-president of the International Union and manager of the Chicago region. Although he was indicted as a defendant along with the other defendants-appellants, the jury acquitted him.
n3 Caporale was secretary-treasurer of the Chicago District Council of the Union and also a special representative to the International Union.
n4 Pilotto was the vice-president of the Chicago District Council of the Union, the president of the Union Local 5 in Chicago, and a special representative to the International Union. [**4]
n5 Fosco held his share surreptitiously.
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In return for getting C & A the contract, Fosco, Caporale and Pilotto received periodic cash payments over a four year span of time. n6 Caporale received 25 cents for each union member covered every month, or roughly $3000 per month. In 1975 alone Caporale received $31,900, while Fosco received $12,800 and Pilotto received $1200. Milano and his son, Daniel Milano, Jr., made the payments at the offices of C & A.
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n6 In addition to the cash payments, Fosco's son was made a vice-president of C & A.
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In 1972 C & A sought the dental benefits contract for Union members in Florida. Fosco agreed to secure the contract for the Milanos. Milano, Jr., travelled to Florida to meet with defendant-appellants Salvatore Tricario, n7 John Giardiello, n8 Bernard Rubin n9 and Seymour Gopman. n10 The parties agreed that C & A would pay 15% of the contract receipts to the four appellants through a dummy [**5] corporation. In exchange, C & A obtained the Florida contract through an entity called Dental/Vision Care Centers ("DVCC").
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n7 Tricario was an officer in the Union Local 767 in West Palm Beach and a trustee of the Local's Health and Welfare Benefit Fund.
n8 Giardiello was an officer of Union Local 767, and a trustee of the Florida Dental Plan.
n9 Rubin was president of Local 666 in Miami, business manager of Local 478, a trustee of three Union Health and Welfare Benefit Fund boards, president of the Southeast Florida District Council of the Union, and a representative to the International Union.
n10 Gopman was legal counsel to the Health and Welfare Benefits Fund in Florida and counsel to the Union locals and district council in southern Florida.
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In accordance with this agreement, DVCC made regular payments of 15% of the gross monthly premiums to a series of dummy corporations that funneled the money to Gopman, Rubin, Tricario and Giardiello. n11 The first of these dummy corporations was Fortune [**6] Services, a company owned by Gopman, Rubin, Tricario and Giardiello. Fortune Services supposedly performed eligibility checks on union members on behalf of DVCC, although it did not in fact perform that service. In fact, Fortune Services had no office or professional staff and was run out of Gopman's law office by his mother-in-law. Each month, Gopman would submit a bill on behalf of the company in the amount of 15% of DVCC's monthly billings.
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n11 Beyond the monthly 15% payments to the corporate conduits, Milano, Jr., made several cash payments to Rubin and Tricario between 1972 and 1977.
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Fortune Services was replaced in 1975 by a corporate conduit called Ace Services, which operated in an identical manner to Fortune Services. In late 1975, Ace Services was replaced by another conduit company called Sales Administrators for Employee Fringe Advantages ("SAEFA"). SAEFA was owned by defendant-appellant Louis Ostrer. n12 SAEFA was paid 15% of DVCC's gross receipts purportedly for soliciting new business for DVCC, [**7] although SAEFA did not in fact solicit any new business for DVCC. SAEFA was succeeded by Drake Towers Joint Venture, a development project associated with appellant George Wuagneux's company, Sage Corporation. Like the other conduit corporations, Drake Towers received 15% of DVCC's gross receipts. Wuagneux and Rubin were partners in Drake Towers, and Gopman also was associated with the company. Drake Towers was replaced in turn by Fringe Benefits, Inc., a company owned by Ostrer. The last payments made pursuant to the agreement were made in 1977 to Fringe Benefits, Inc.
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n12 Ostrer had previously written insurance policies for the Union and paid kickbacks to Union officials.
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Meanwhile, as the contract in Florida was running its course, the Fund trustees in Chicago decided to expand the dental coverage and include vision care for its members. In exchange for securing this contract for C & A, Milano, Sr., paid Pilotto [*1497] 10% of the new premiums through a dummy corporation maintained by James Pinkard, [**8] Pilotto's son-in-law. As with most of the Florida conduit corporations, Pinkard's company received the kickbacks under the guise of payments due for services purportedly rendered checking members' eligibility.
Between 1970 and 1973, a man named Joseph Hauser discussed setting up a life insurance company with Terence O'Sullivan, vice-president of the International Union. The two men agreed that if Hauser could set up a company that could write policies on a nationwide basis, O'Sullivan would use his influence to get business for the company in exchange for stock in the company and kickbacks. Hauser also met with Caporale, Fosco, Tricario and Giardiello about setting up business in Florida and in the midwest, and again the parties agreed to exchange business for kickbacks and stock.
In 1973 Hauser purchased the Farmers National Life Insurance Company in Florida. Gopman helped with the legal work and assisted in bribing the Florida Insurance Commissioner to facilitate the purchase. Hauser reached an agreement with Rubin that Hauser would pay a 15% kickback in exchange for the life insurance business of the Union locals in Florida. Gopman and Rubin also received stock in the insurance [**9] company as part of the deal, and Hauser paid Gopman's law firm a $2500 monthly retainer, although no services were actually rendered. After the contracts were awarded to Farmers, Hauser began making regular payments to Rubin, Gopman, Tricario, Giardiello, Fosco and O'Sullivan, as well as making supplemental payments at various times and buying them cars and jewelry, among other things. Rubin set up a dummy corporation associated with Farmers that laundered $250,000 in payments from Hauser.
In 1974 Fosco arranged for Hauser to get the midwest contract. Hauser's company paid monthly amounts to a dummy corporation run by Fosco's son, supposedly as commissions for policies written by the dummy corporation. This amount was later supplemented with $36,844.36 because "the outfit" was upset that not enough money was coming in. Fosco also arranged for the Indiana Union contract to be awarded to Hauser, again utilizing the dummy corporation run by Fosco's son to funnel kickback payments from Hauser.
In 1976 Hauser agreed to pay Caporale $25,000 plus 25 cents per member per month in exchange for the contract to reinsure all of the Chicago union insurance business, including the C & A dental [**10] clinics. Although Hauser actually paid $15,000 of that amount, the contract never materialized because Farmers began to experience financial troubles.
II. PRIOR PROCEEDINGS
Indictments were returned for sixteen individuals allegedly implicated in the scheme described above. Five of the defendants were severed prior to trial and are not appellants here. n13 The remaining defendants went to trial before a jury in the Southern District of Florida on a one count indictment charging all eleven defendants with conspiracy to violate the federal racketeering statute, 18 U.S.C.A. § 1962(d). Three of the defendants were acquitted, n14 while the remaining eight, the appellants here, were convicted.
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n13 The five severed defendants were Paul A. DiFranco, Paul Fosco (son of Angelo Fosco), James P. Norton, James Pinkard (Pilotto's son-in-law), and Santo Trafficante.
n14 The acquitted defendants were Angelo Fosco, Terence O'Sullivan, and Anthony Arcardo.
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The trial court sentenced all [**11] of the defendants to various periods of incarceration and, in addition, ordered Gopman, Tricario, Giardiello, and rubin to forfeit $1,254,964.80 funneled to them through various corporations as part of the kickback scheme. The trial court also ordered Pilotto to forfeit $595,701.90 funneled to a company controlled by his son-in-law as part of the kickback scheme.
[*1498] Several weeks after the verdict in this case was returned, a Miami newspaper reported that the government was conducting an investigation into allegations of jury tampering. The defendants moved for a new trial and other relief based on the news report. The district court denied the motions.
All eight defendants appealed and full briefs were filed under the case number 82-5964. Since the government stated in its brief that it would not oppose a remand to the district court for the limited purpose of conducting an evidentiary hearing on the jury tampering issue, this Court remanded the case for that purpose. The trial court held six days of hearings on the claim and all jurors and alternates testified or were deposed. In addition, the court took evidence from FBI agents and a federal prosecutor who investigated [**12] the jury tampering claim, and from several persons identified as possible sources of the rumor. The trial court concluded that the defendants had failed to demonstrate by a preponderance of credible evidence that any extrinsic matter had tainted the jury's deliberation. That matter comes back on appeal as case number 85-5670 and is consolidated with the appeal on the merits.
III. DISCUSSION
The appellants' briefs taken as a whole raise twelve distinct points of appeal. n15 These points will be discussed seriatim in order of significance.
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n15 In addition to advancing their own arguments, Giardiello, Rubin, Ostrer and Gopman adopt the arguments of all other appellants. Since some of the other appellants' arguments do not apply to some or all of these appellants, we will appropriately indicate throughout this opinion when any of these four appellants have joined in an argument by adoption.
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The appellants argue that the evidence presented at trial was insufficient [**13] to support their convictions for conspiracy to violate RICO in three respects. First, most of the appellants argue that their participation in an "enterprise" was not properly proved because there was a material variance between the enterprise alleged in the indictment and the enterprise actually proven at trial. n16 Second, Gopman claims that there is no evidence that he was involved in the conspiracy during the period of time charged in the indictment. Third, Ostrer and Wuagneux claim that the evidence at trial was insufficient to tie them to the conspiracy. In reviewing these claims of insufficiency of the evidence, we must make all inferences and credibility choices in support of the jury verdict and examine whether a reasonable trier of fact could find that the evidence presented at trial established guilt beyond a reasonable doubt. United States v. Perkins, 748 F.2d 1519, 1526 (11th Cir. 1984); United States v. Alonso, 740 F.2d 862, 872 (11th Cir. 1984), cert. denied, 469 U.S. 1166, 105 S. Ct. 928, 83 L. Ed. 2d 939 (1985).
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n16 Appellants also make a meritless hypertechnical argument to the effect that the indictment improperly charged multiple enterprises rather than a single enterprise because it charged the International Union, its subordinated bodies, and its affiliated employee benefit plans.
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1. Variance between indictment and proof at trial
Appellants argue that the district court erred by instructing the jury that the enterprise consisted solely of the International Union when in fact the evidence failed to establish that the appellants conspired to participate in the affairs of the International Union. The appellants contend that instead of establishing a single conspiracy run through a single enterprise, the evidence at trial established the existence of two separate and distinct conspiracies, the "dental" conspiracy, revolving around Caporale, Fosco and Pilotto, and the "insurance" conspiracy, revolving around Hauser's venture into the business of insuring Union members. As a result, appellants contend, there is an impermissible material variance between the indictment and the proof at trial.
[*1499] A "variance" occurs when the evidence at trial establishes facts materially different from those alleged in the indictment. United States v. Johnson, 713 F.2d 633, 643 n. 9 (11th Cir. 1983), cert. denied, 465 U.S. 1081, 104 S. Ct. 1447, 79 L. Ed. 2d 766 (1984). A variance between allegations and proof is reversible error [**15] only when it actually prejudices the defendant. Kotteakos v. United States, 328 U.S. 750, 66 S. Ct. 1239, 90 L. Ed. 1557 (1946); United States v. McCrary, 699 F.2d 1308, 1310 (11th Cir. 1983). To evaluate whether reversible error occurred in this case, we must make two inquiries; 1) whether a material variance did indeed occur and 2) if so, whether the appellants suffered substantial prejudice as a result of the variance. Id.; see United States v. Jenkins, 779 F.2d 606, 617 (11th Cir. 1986); United States v. Warren, 772 F.2d 827, 835 n. 12 (11th Cir. 1985), cert. denied, 475 U.S. 1022, 106 S. Ct. 1214, 89 L. Ed. 2d 326 (1986).
The first problem in determining whether a material variance occurred in this case is in determining precisely what the indictment charged. The indictment described the enterprise as the International Union, "including all of its subordinate bodies and affiliated employee benefit plans." In the charge read to the jury, however, the district court declined to give the phrase "including subordinate bodies and affiliated benefit plans" on the grounds that there was no evidence [**16] at trial establishing that the International Union had subordinate bodies or affiliated benefit plans. At the same time, the district court refused to strike the same language from the indictment. Throughout the jury instructions the district court characterized the enterprise at issue as the International Union, although it cautioned the jury that its description of the charges was "summary". The court later referred the jury to the indictment for a more complete statement of the charges, which of course defined the enterprise more broadly than just the International Union.
The appellants interpret the district court's instruction as requiring the government to prove that all of the racketeering activities alleged were conducted through the International Union proper. It is clear, however, that the jury charge viewed as a whole, which includes the original indictment, establishes that the enterprise charged was not limited to the International Union parent organization alone. Although the district judge omitted the phrase "including its subordinate bodies and affiliated benefit plans" from the charge, he did not strike it from the indictment and alter characterized his description [**17] of the charges as "summary", referring the jury to the more detailed description in the indictment. The jury could therefore reasonably conclude that the enterprise charged in this case was not limited to the legal entity of the International Union, but that it might consist of something broader. In addition, the term "enterprise" as broadly defined by the statute embraces not only formally defined entities, but associations of entities. See United States v. Thevis, 665 F.2d 616, 625-26 (5th Cir.), cert. denied, 456 U.S. 1008, 102 S. Ct. 2300, 73 L. Ed. 2d 1303 (1982). Consequently, the jury could have found that the enterprise involved in this scheme was the International Union and its subordinate or affiliated local bodies and its benefit plans.
Assuming however for present purposes that the charge limited the enterprise to the International Union alone, we must still measure the evidence established at trial against the charge to determine whether the proof at trial materially varies from it. Appellants allege that a material variance occurred in two ways: first, that the proof at trial established two distinct conspiracies rather than one [**18] and, second, that in any event the evidence did not establish a conspiracy operating through the enterprise charged.
The analysis for both contentions is the same: even if the evidence arguably establishes multiple conspiracies, n17 there is [*1500] no material variance from an indictment charging a single conspiracy if a reasonable trier of fact could have found beyond a reasonable doubt the existence of the single conspiracy charged in the indictment. United States v. Jenkins, supra, 779 F.2d 616-17 (quoting United States v. Cole, 755 F.2d 748, 764 (11th Cir. 1985)); United States v. Plotke, 725 F.2d 1303, 1308 (11th Cir.), cert. denied, 469 U.S. 843, 105 S. Ct. 151, 83 L. Ed. 2d 89 (1984). In determining whether a reasonable trier of fact could have found a single conspiracy, the courts in this Circuit have looked at three factors: 1) whether a common goal existed, 2) the nature of the scheme, and 3) overlap of participants. Jenkins, supra, 779 F.2d at 617; United States v. Lee, 695 F.2d 515, 518 (11th Cir.), cert. denied, 464 U.S. 839, 104 S. Ct. 130, 78 L. Ed. 2d 125 (1983). [**19]
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n17 In a case where the evidence would support finding both a single conspiracy and multiple conspiracies, a defendant may be entitled to a jury instruction on multiple conspiracies. United States v. Sutherland, 656 F.2d 1181, 1189 n. 5 (5th Cir. 1981), cert. denied, 455 U.S. 949, 102 S. Ct. 1451, 71 L. Ed. 2d 663 (1982). A failure to give such an instruction is not reversible error, however, unless the defendant can show prejudice. Id.
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We conclude that there was not a material variance in this case. A reasonable trier of fact could have found that the evidence presented at trial established that Caporale, Pilotto, Gopman, Rubin, Tricario, and Giardiello conspired to use their positions of authority in the Union organization as the means to commit the predicate kickback offenses. Appellants Wuagneux and Ostrer likewise conspired to promote the kickback scheme by taking advantage of the other appellants' positions of influence within the Union organization. The "dental [**20] care" branch of the conspiracy began when Fosco, Caporale and Pilotto, all officers of or representatives to the International Union, sought to take advantage of their influence within the Union by steering the Union members' benefit plan contracts to C & A, a company prepared to pay kickbacks to them. Similarly, the "insurance" branch of the conspiracy began when Fosco, O'Sullivan, Coia, Tricario and Giardiello, also officers of or representatives to the International Union, persuaded Hauser to go into the insurance business with the promise that they would use their influence in the Union to obtain contracts for Hauser in exchange for kickbacks. A reasonable trier of fact considering this evidence could have found that the appellants in both branches of the conspiracy were operating a single overarching conspiracy through the enterprise of the International Union by making use of the influence of high-ranking officers of or representatives to the International Union to affect the award of insurance benefits contracts for their own personal monetary gain.
Even if the evidence did not support the jury's finding of a single conspiracy, thereby creating a material variance between [**21] the proof and the indictment, appellants must still show that the variance affected their substantial rights. United States v. Warren, supra, 772 F.2d at 835 n. 12 (11th Cir. 1985); United States v. Rodriguez, 765 F.2d 1546, 1553 (11th Cir. 1985). The courts have found prejudice to substantial rights from a material variance in two circumstances: 1) where the proof at trial differed so greatly from the charges in the indictment that the defendant was unfairly surprised and had an inadequate opportunity to prepare a defense, see, e.g., United States v. Hall, 632 F.2d 500, 504 (5th Cir. 1980), and 2) where there are so many defendants and so many separate conspiracies before the jury that there is a substantial likelihood that the jury would transfer evidence from one conspiracy to a defendant involved in another conspiracy, see, e.g., United States v. Warren, supra, 772 F.2d at 835 n. 12.
The appellants have failed to show prejudice from any variance that might have occurred. They cannot claim unfair surprise since the variance did not alter the crime charged, the requisite elements of proof or the appropriate [**22] defenses in a significant manner. See United States v. John, 587 F.2d 683 (5th Cir.) cert. denied, 441 U.S. 925, 99 S. Ct. 2036, 60 L. Ed. 2d 399 (1979). Appellants were clearly on notice [*1501] as to the nature of the charges against them and the variance did not affect their ability to prepare a defense. Nor can they show that there is a likelihood that the jury transferred evidence of guilt as to one of the conspiracies to a defendant uninvolved in that conspiracy. Not only is a case involving eleven defendants and two possible conspiracies not so complex by definition that the jury will be unable to segregate the evidence properly n18, but the fact that the jury acquitted three of the eleven defendants on trial is evidence that the jury was indeed able to sift the evidence as to each defendant individually. See Rodriguez, supra, 765 F.2d at 1553 (no proof of prejudicial variance due to jury's inability to segregate evidence where one defendant acquitted on some charges).
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n18 Compare Kotteakos v. United States, 328 U.S. 750, 66 S. Ct. 1239, 90 L. Ed. 1557 (1946) (variance held prejudicial where indictment charged one conspiracy but proof at trial showed eight conspiracies involving 32 defendants), with Berger v. United States, 295 U.S. 78, 55 S. Ct. 629, 79 L. Ed. 1314 (1935) (variance held non-prejudicial where indictment charged one conspiracy but proof at trial showed two conspiracies involving five defendants), and Jenkins, supra, 779 F.2d at 617 (variance held non-prejudicial where indictment charged one conspiracy but proof showed two conspiracies involving eight defendants).
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2. Gopman's claim of insufficient evidence
Gopman claims that the evidence was insufficient to show that he was involved in the conspiracy within the five year statute of limitations period. In making this argument, Gopman focuses on the "insurance" branch of the conspiracy and points to some evidence that he withdrew from that branch of the conspiracy more than five years before the indictment was issued by advising the Local Fund board of trustees in Florida to pull out of Hauser's company. Gopman's argument fails, however, because it ignores the abundance of evidence establishing Gopman's involvement in the "dental care" branch of the conspiracy within the relevant time frame. Since we conclude that the jury could have reasonably found that the appellants were operating pursuant to a single conspiracy, evidence that Gopman participated in that conspiracy, regardless of which branch, is enough to support his conviction. See Jenkins, supra, 779 F.2d at 616-17.
3. Ostrer's and Wuagneux's claims of insufficient evidence
Ostrer and Wuagneux also assert claims of insufficiency of the evidence. Both appellants are in a slightly different position from [**24] the other appellants because they are not officers of or representatives to either the Local or the International Union. Instead, they operated outside of the Union in setting up and operating conduit corporations for funneling the kickback money to the other appellants. Both Ostrer and Wuagneux admit that DVCC made substantial payments to corporations they controlled, but they contend that the evidence did not establish that the payments had anything to do with the kickback scheme. We reject their claims.
Ostrer contends that the only evidence tying him into the kickback scheme was the unreliable hearsay testimony of Milano, Jr., to the effect that Ostrer's company, SAEFA, acted as a conduit for kickback payments and that it never performed the service it purportedly was being paid to provide. The credibility and weight of properly admissible evidence n19 is for the jury to decide, however, and the jury could reasonably find based on Milano's testimony that Ostrer participated in the kickback scheme. Furthermore, Milano, Jr.'s testimony was not the only evidence linking the payments to SAEFA with the conspiracy. Hauser also testified that Ostrer and Wuagneux had told him that they [**25] were "laundering" kickback money. In addition, the circumstantial evidence surrounding the payments to SAEFA, such as the amount of the payments and the pattern of successor conduit corporations, supports a finding that Ostrer was implicated in the scheme. United [*1502] States v. Mosquera, 779 F.2d 628, 630 (11th Cir. 1986); United States v. Jenkins, supra, 779 F.2d at 610.
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n19 See infra Part E discussing the admissibility of Milano, Jr.'s hearsay testimony.
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Wuagneux makes essentially the same argument, claiming insufficiency of the evidence because of the unreliability of Milano, Jr.'s and Hauser's testimony and the lack of any evidence beyond that testimony establishing that his joint venture project, Drake Towers, was used in furtherance of the kickback scheme. Again, it was within the jury's province to give whatever credibility and weight they thought appropriate to the testimony of both witnesses, and based on that testimony the jury could reasonably find [**26] that Wuagneux participated in the scheme. As with Ostrer, the circumstantial evidence surrounding the payments to Drake Towers is consistent with the government's theory of the case. n20
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n20 Wuagneux also advances a meritless claim that the government failed to prove the commission of two predicate acts as required by 18 U.S.C.A. § 1962(d) because his use of Drake Towers as a conduit corporation amounted to a single act. The evidence at trial showed, however, that Drake Towers received 17 separate payments from DVCC over a 17 month period. Under the case law interpreting the predicate act requirement of RICO, each of these payments constitutes a separate violation of 18 U.S.C.A. § 1954 and therefore a separate predicate act. See United States v. Colacurcio, 659 F.2d 684, 688 n. 4 (5th Cir. 1981), cert. denied, 455 U.S. 1002, 102 S. Ct. 1635, 71 L. Ed. 2d 869 (1982); accord, United States v. Boffa, 688 F.2d 919, 935-36 (3d Cir. 1982), cert. denied, 460 U.S. 1022, 103 S. Ct. 1272, 75 L. Ed. 2d 494 (1983).
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B. Jury Tampering
The appellants' next point of appeal challenges the district court's ruling in the proceedings on remand investigating the jury tampering allegations. The issue of jury tampering arose after the trial had concluded when a report appeared in a Miami newspaper that a grand jury was conducting an investigation into the possibility that a male juror in a major labor union racketeering case had been given a $200,000 bribe to secure the acquittal of three or four defendants in the case. The district court's six day evidentiary hearing, which consisted of testimony from the jurors at issue, the government officials who investigated the claim of tampering, and various individuals believed to know the source of the rumor, as well as a review of most of the reports and transcripts from the grand jury investigation, turned up no credible evidence suggesting that anyone had actually attempted to bribe or otherwise influence any of the jurors.
The hearing did reveal that one of the jurors, John Curtice, both prior to and during deliberations, had made several references to certain friends or relatives he had in the Chicago area purportedly connected with the Mafia. [**28] He told some of the other jurors that he spoke with these friends or relatives on a daily basis about the trial. Curtice remarked more than once that his friends in Chicago had told him that some defendants might have to be sacrificed in order to acquit others, and that his Chicago connections were pleased or displeased with how the trial was going.
The district court concluded that no tangible evidence supported the allegation that a juror was bribed or otherwise influenced by an extrinsic contact. The court also found that while juror Curtice's remarks were "inappropriate", it was "clear from the testimony that these remarks were perceived for the most part as having been made in jest" and that "these remarks had absolutely no influence upon the jurors in their deliberations." As a result, the court ruled that the appellants failed to prove a prejudicial factual intrusion into the jury's deliberations.
The appellants argue that the district court erred in reaching this conclusion in four ways: first, the court erroneously placed the burden of showing that an extrinsic factual matter tainted the jury's deliberations upon the appellants; second, the court erred by not finding that [**29] the jury was in fact tainted; third, the court improperly refused to compel the testimony of two reporters involved in the spread of the jury tampering rumor; and fourth, the anti-Italian ethnic bias evident among the jurors warrants a new trial.
[*1503] Appellants' first claim is meritless. The law in this Circuit is well settled that the defendant bears the burden of establishing that an extrinsic contact with a jury in fact occurred. United States v. Winkle, 587 F.2d 705, 714 (5th Cir.), cert. denied, 444 U.S. 827, 100 S. Ct. 51, 62 L. Ed. 2d 34 (1979). Once the defendant has proved extrinsic contact, the burden then shifts to the government to demonstrate that the contact was not prejudicial. United States v. Phillips, 664 F.2d 971, 999 (5th Cir. 1981), cert. denied, 457 U.S. 1136, 102 S. Ct. 2965, 73 L. Ed. 2d 1354 (1982). The district court charged the appellants with the burden of proving that some extrinsic contact with the jury had been made, and concluded that they had failed to shoulder that burden. The court thus correctly allocated the burden of proof.
Appellants' second claim is that the [**30] district court clearly erred in finding that the jury was not in fact tainted. The district court's conclusion was based on two findings: first, that the appellants failed to produce any evidence whatsoever to show that any outside contact with the jury was made and, second, that any questionable conduct by juror Curtice had no effect on the jury's deliberations.
Appellants dispute the first finding by arguing that the phone calls Curtice claimed to receive from relatives or friends in Chicago constitute extrinsic contacts. Since the record does not reflect that the appellants ever established that the phone calls actually took place, or what the content of the phone calls was, we can hardly conclude that the district court erred in determining that no extrinsic contact took place.
Appellants dispute the second finding by pointing to portions of the testimony at the evidentiary hearing which they claim establish that the jury was in fact influenced by Curtice's comments. Specifically, appellants claim that four of the jurors testified that they thought Curtice was connected with the mob and that one juror, Dora Swanko, believed Curtice.
A review of the transcript does not support [**31] appellants' characterization of the testimony. The transcript reveals that the four jurors who supposedly testified that they believed Curtice was associated with the mob actually testified only that Curtice might have told them that he had relatives associated with the mob. All four jurors also testified that they believed that Curtice was joking when he made those statements. Likewise, the transcript reflects that, although Dora Swanko stated that she believed Curtice was receiving phone calls from family members in Chicago, she did not know what the calls were about or believe that the calls were to members of the Mafia. She also testified that she thought Curtice's comments were made in a joking context. Consequently, we affirm the district court's determination that the jury's deliberations in this case were untainted.
Appellants also protest the district court's refusal to compel the testimony of two reporters who might have had information on the source of the jury tampering matter, Clyde Wallace and Andy Rosenblatt. In reviewing the appellants' claims, we are mindful that the extent of a district court's inquiry into alleged extrinsic contacts with the jury is committed to [**32] the court's sound discretion. United States v. Caldwell, 776 F.2d 989, 997 (11th Cir. 1985); United States v. Watchmaker, 761 F.2d 1459, 1465 (11th Cir. 1985), cert. denied, 474 U.S. 1100, 106 S. Ct. 879, 88 L. Ed. 2d 917 (1986).
Clyde Wallace and Andy Rosenblatt are reporters who wrote articles about the rumors of a grand jury investigation into a $200,000 bribe of a juror. Wallace, living in the Washington, D.C., area, declined to testify citing First Amendment privilege and personal health reasons. Wallace did reveal that his information originated from Terence O'Sullivan, one of the acquitted defendants. Wallace offered a physician's report that his health did not permit travel or deposition, and the district court confirmed that report by appointing an independent physician to examine Wallace. [*1504] Wallace's health notwithstanding, the court gave appellants twenty days to submit interrogatories which it in turn would order Wallace to answer. Appellants failed to submit the interrogatories until almost three months later. At that point the court refused the request as waived and noted that the interrogatories were [**33] not essential for a fair determination of the jury tampering issue because the information Wallace was thought to have had been obtained from O'Sullivan himself.
The district court's decision to disallow the interrogatories of Wallace was entirely reasonable. Appellants failed to take advantage of the means made available to them to interrogate Wallace and cannot now claim that their lack of diligence was error on the part of the trial court. Moreover, appellants were able to get the information they sought from Wallace -- the source of the jury-tampering rumor -- from O'Sullivan, the man Wallace identified as his source. O'Sullivan did testify at the evidentiary hearing, although he denied saying anything about jury-tampering to anyone.
Rosenblatt refused to testify at the evidentiary hearing on grounds of reporter's privilege. The trial court held that the appellants failed to show that Rosenblatt's information was otherwise unavailable and that there was a compelling interest in securing his testimony. The standard governing the exercise of reporter's privilege as articulated in Miller v. Transamerican Press, Inc., 621 F.2d 721, 726 (5th Cir. 1980), cert. [**34] denied, 450 U.S. 1041, 101 S. Ct. 1759, 68 L. Ed. 2d 238 (1981), provides that information may only be compelled from a reporter claiming privilege if the party requesting the information can show that it is highly relevant, necessary to the proper presentation of the case, and unavailable from other sources. See In re Selcraig, 705 F.2d 789, 792 (5th Cir. 1983). Rosenblatt's article reported that the FBI had received allegations concerning possible tampering, but the FBI agents involved testified themselves at the evidentiary hearing as to the origination of the rumor. The district court did not err in concluding that the appellants failed to show that Rosenblatt had information that was unavailable from other sources or necessary to the proper presentation of the case in light of the fact that the FBI's information was provided to appellants in court.
Finally, appellants claim that the jury harbored an ethnic bias against Italians and that this bias entitles them to a mistrial under the principle articulated in United States v. Heller, 785 F.2d 1524, 1527-28 (11th Cir. 1986). Appellants contend that the record from the remand [**35] proceedings establishes that "insidious, ethnic taunts" took place in the jury room. Juror Curtice testified at the evidentiary hearing that some of the other jurors kidded him about being Italian, usually as part of an exchange with him about his claim to have cousins in Chicago and his Mafioso connections. Curtice also testified that the jurors would occasionally joke about some of the defendants "look[ing] like . . . typical underworld" figures. n21
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n21 Appellants argue that the comments of another juror, Jo Anne Allen, also establish a basis for a mistrial on grounds of bias. After eight of the defendants were convicted but before the remaining three defendants were acquitted during the jury's deliberations, two of the jurors sent a note to the judge asking "if one or more of the members of the jury is not fulfilling his or her duty according to the oath taken, can he be removed from jury duty? If not, then I wish to be removed as I do not feel that a fair and just verdict can be reached." The trial judge responded with an instruction to all jurors to go home and cool down and to come back the next day.
The testimony of various jurors at the evidentiary hearing indicates that the problem juror was not Curtice, but Jo Anne Allen, a black juror. The note was prompted by a statement apparently made by Allen that if the defendants in this case had been black, they would all be convicted, meaning that she felt that some of the jurors were giving the remaining three defendants a break because they were white. We cannot hold that this isolated statement made by a single juror establishes that the verdicts in this case were based on racial bias, particularly when the remaining three defendants were eventually acquitted, meaning that Allen herself eventually voted to acquit.
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[*1505] In United States v. Heller, supra, 785 F.2d at 1527-28, a Jewish trial attorney was convicted of tax evasion and falsely subscribing to an income tax return. After a note from the jury foreman during deliberations alerted the court to possible juror misconduct, the court questioned each member of the panel individually. The voir dire revealed that, during the course of the trial and into deliberations, several of the jurors had made a series of anti-Semitic comments and directed ethnic slurs at the defendant, saying things like ". . . he [the defendant] is Jewish. We are just going to hang him." Id. at 1526.
The Court of Appeals for this Circuit declared a mistrial, holding that the jury's ethnic and religious slurs in this case constituted impermissible jury misconduct. Id. at 1527. The court rejected the government's arguments that the anti-Semitic comments were meaningless because they were made in jest on grounds that ethnic humor itself is an expression of prejudice and that the district court's inquiry did not sufficiently establish that ethnic bias did not affect the jury's verdict.
We find this case [**37] distinguishable from Heller, however. There is ample evidence to establish that the verdicts in this case were not based on ethnic bias, despite the joking among the jury about Italians and the Mafia. n22 The jury in this case deliberated three full weeks to arrive at a verdict, acquitting some of the defendants in the process. Furthermore, not only were two of the jurors themselves Italian, but some of the defendants the jury acquitted were Italian. By the same token, some of the defendants the jury convicted were not Italian. In addition, most of the joking around, which took place on lunch and coffee breaks rather than while the jury was actually deliberating, was directed at Curtice, a juror, rather than at the defendants as was the case in Heller. Although the joking around among the jury members in this context was inappropriate, the record does not indicate that any of the jurors prejudged the guilt or innocence of any of the defendants as the result of ethnic bias.
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n22 At oral argument, appellants contended that Heller stands for the proposition that ethnic jokes made in the jury room are per se basis for a mistrial. We do not read Heller as laying down a per se rule to that effect, but as establishing the proposition that a mistrial is warranted where it appears that ethnic bias on the part of the jury influenced the verdict, and that ethnic jokes can serve as a basis for finding ethnic bias.
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C. Forfeitures
Appellants Pilotto, Gopman, Tricario, Giardiello and Rubin challenge the propriety of the district court's monetary forfeiture orders on several grounds. The penalty provision of the RICO statute, 18 U.S.C.A. § 1963(a), provides that individuals convicted of violating the statute
shall be fined not more than $25,000 or imprisoned not more than twenty years, or both, and shall forfeit to the United States, irrespective of any provision of State law --(1) any interest the person has acquired or maintained in violation of section 1962;
* * * * * *
(3) any property constituting, or derived from, any proceeds which the person obtained, directly or indirectly, from racketeering activity or unlawful debt collection in violation of section 1962.
In accordance with this provision, the district court ordered Pilotto to forfeit the $595,701.90 he had ordered C & A to pay to the conduit corporation run by his son-in-law, James Pinkard. It also entered forfeiture orders against Gopman, Tricario, Giardiello, and Rubin for the $1,254,964.80 paid by DVCC to the succession of conduit corporations in Florida. [**39]
1. Pilotto's claim
Pilotto claims that the district court improperly based its forfeiture order against him on a theory of vicarious liability. We need not reach at this juncture the question of whether a forfeiture order may be imposed based on a theory of vicarious liability because it is apparent that the district [*1506] judge did not in fact base his order on such a theory. The judge made findings of fact based on ample evidence that the payments to Pinkard's corporation were disguised kickback payments to Pilotto. The court also found that Pilotto had in fact received $595,701.90 in proceeds from the illegal scheme through the conduit corporation. Consequently, the district court properly ordered forfeiture of that amount, and Pilotto's challenge to the order is meritless.
2. Tricario, Gopman, Giardiello and Rubin -- waiver of jury trial
Tricario, Gopman, Giardiello and Rubin also challenge the forfeiture order entered against them on grounds that the trial judge misled them into waiving their right to a jury trial on the issue of joint and several liability. n23 We find, however, that the record does not support their contention.
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n23 Giardiello and Rubin have not briefed this issue, but adopt the arguments of the other appellants.
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The indictment originally sought joint and several liability against all defendants for all the proceeds of the entire scheme. When the trial judge inquired whether any of the defendants wished a jury trial on the question of forfeiture, Gopman and Giardiello waived a jury trial from the outset. n24 Later in the trial, the court rejected the government's broad theory of joint and several liability, and at that point Tricario and Rubin waived jury trials on the forfeiture question.
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n24 Caporale and Pilotto, neither of whom raises this issue, did request a jury trial should the court allow the government to proceed on a joint liability theory.
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Later still, however, the court allowed the government to offer a narrower theory of joint and several liability limited to Gopman, Rubin, Tricario and Giardiello as joint owners and beneficiaries of kickback payments to the corporation set up in conjunction with the "dental care" branch of the conspiracy. None of the four appellants at this point requested trial [**41] by jury on the forfeiture issue or objected that their prior waiver had been conditioned on an understanding that the trial court had rejected joint liability in any form. Under these circumstances we cannot find that the district court misled any of the appellants in any way into waiving their right to a jury trial on the forfeiture issue.
3. Tricario, Giardiello, Gopman and Rubin -- joint and several liability
Tricario, Giardiello, Gopman and Rubin also challenge the forfeiture order on the grounds that it improperly grafted the tort principle of joint and several liability onto the criminal RICO forfeiture provision. n25 The issue of whether a RICO forfeiture can be imposed jointly and severally is an issue of first impression. A review of the statutory scheme as a whole and the purpose of the forfeiture provision, however, persuades us that imposition of joint and several liability in a forfeiture order upon RICO co-conspirators is not only permissible but necessary in these circumstances to effectuate the purpose of the forfeiture provision.
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n25 Giardiello, Gopman and Rubin have adopted this argument.
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Section 1963(a)(1) of U.S.Code Title 18 requires forfeiture to the United States of "any interest . . . acquired . . . in violation of section 1962." There is no question in this case that the series of conduit corporations in Florida received the kickback payments from DVCC in violation of Section 1962. There is also no question that kickbacks were paid to the conduit corporations for the use and benefit of the four defendants ordered to forfeit the kickbacks. The government conceded, however, that it could not prove how the kickbacks had been allocated among the four defendants. As a consequence, the trial court imposed joint and several liability upon all four defendants for the total amount of kickbacks paid to the conduit corporations. The forfeiture provision, however, is silent on the question of whether a legitimately forfeitable [*1507] interest may be forfeited through the imposition of joint and several liability.
Tricario, Giardiello, Gopman and Rubin argue that imposing joint and several liability is improper for three reasons: 1) the language of the forfeiture provision directs that forfeiture should be imposed upon an individual who violates Section 1962, [**43] thereby excluding by negative implication joint and several liability; 2) joint and several liability has never been imposed in a criminal case before; and 3) the doctrine of joint and several liability is inconsistent with criminal law's traditional focus on individual wrongdoing and the practice of fashioning an individual penalty appropriate for that wrongdoing.
We are not persuaded by any of these arguments. First, we reject the contention that Section 1963(a)(1) excludes joint and several liability by negative implication. The statute states that individuals convicted of violating Section 1962 shall forfeit any interest acquired as a result of the violation. 18 U.S.C.A. § 1963(a)(1). The four individuals subject to the forfeiture order at issue here, Tricario, Giardiello, Gopman and Rubin, were each convicted of violating Section 1962 and ordered to forfeit the proceeds of the violation. As individuals convicted under Section 1962, they fall squarely within the forfeiture provision. The requirement that a convicted individual forfeit the proceeds from his or her illegal activity in no way implies that the liability may not be imposed in a joint and [**44] several fashion.
Second, the fact that joint and several liability has never been imposed before in a criminal case does not mean that Congress may not act to provide for such liability. n26 While the statute itself does not expressly state that properly found liability may be imposed in a joint and several manner, the nature of a RICO conspiracy violation and the legislative history of the forfeiture provision indicate that joint and several liability is not only consistent with the statutory scheme, but in some cases will be necessary to achieve the aims of the legislation.
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n26 None of the appellants that challenge the joint and several imposition of liability contend that the imposition of such liability is outside the scope of penalties Congress is empowered to impose. However, Tricario, and, by "adoption," Giardiello, Gopman and Rubin do present an Eighth Amendment challenge to the imposition of such liability. Since this argument is raised for the first time on appeal, we decline to give it any consideration.
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RICO is a statute "intended to provide new weapons of unprecedented scope for an assault upon organized crime and its economic roots." Russello v. United States, 464 U.S. 16, 26, 104 S. Ct. 296, 302, 78 L. Ed. 2d 17 (1983). The Supreme Court has consistently interpreted RICO's statutory language broadly in order to give effect to Congress's far-reaching legislative intent. See, e.g., Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 105 S. Ct. 3275, 87 L. Ed. 2d 346 (1985); United States v. Russello, supra, 464 U.S. at 20-22, 104 S. Ct. at 299-300; see also United States v. Kaye, 556 F.2d 855 (7th Cir.), cert. denied, 434 U.S. 921, 98 S. Ct. 395, 54 L. Ed. 2d 277 (1977); United States v. Mazzio, 501 F. Supp. 340 (E.D.Pa.1980), aff'd, 681 F.2d 810 (3rd Cir.), cert. denied, 457 U.S. 1134, 102 S. Ct. 2961, 73 L. Ed. 2d 1351 (1982). The legislative history reflects that Congress regarded the ability to reach racketeering profits as key to a successful attack on organized crime. 115 Cong.Rec. 5873, 5884-5885 (1969); S.Rept. No. 225, 98th Cong., 2d [**46] Sess., reprinted in U.S.Code Cong. & Ad.News 3182, 3187-88 (1984); United States v. Navarro-Ordas, 770 F.2d 959, 970 (11th Cir. 1985), cert. denied, 475 U.S. 1017, 106 S. Ct. 1200, 89 L. Ed. 2d 313 (1986). The forfeiture provision is designed to reach those profits. Id. The provision seeks not only to punish but "to remove the profit from organized crime by separating the racketeer from his dishonest gains." United States v. Russello, supra, 464 U.S. at 27-28, 104 S. Ct. at 302-303; see S.Rept. No. 225, 98th Cong., 2d Sess., reprinted in U.S.Code Cong. & Ad.News at 3374.
The critical role the forfeiture provision plays in the Congressional scheme persuades us that joint and several liability [*1508] may be imposed in these circumstances. If the government were required to determine the precise allocation of racketeering proceeds between two offenders before the court could impose forfeiture, the effectiveness of the remedy would be impaired substantially. The offenders would simply have to mask the allocation of the proceeds to avoid forfeiting them altogether. If the government can prove the amount of the proceeds [**47] and identify a finite group of people receiving the proceeds, it defeats the purpose of the provision to hold that the proceeds cannot be forfeited because the government cannot prove exactly which defendant received how much of the pot.
Furthermore, permitting joint and several liability in these circumstances would be consistent with the line of cases in this Circuit holding that the government is not required to trace racketeering proceeds to specific assets before imposing forfeiture. See United States v. Navarro-Ordas, 770 F.2d 959, 969 (11th Cir. 1985); United States v. Conner, 752 F.2d 566, 575 (11th Cir.), cert. denied, 474 U.S. 821, 106 S. Ct. 72, 88 L. Ed. 2d 59 (1985). The courts in these cases characterized a forfeiture order as an in personam judgment, holding that if the defendant received proceeds from racketeers, those proceeds are forfeitable regardless of what the defendant did with the proceeds after he received them. Navarro-Ordas, supra, 770 F.2d at 969; Conner, supra, 752 F.2d at 577. Once the defendant receives racketeering proceeds, he bears the burden of satisfying [**48] the forfeiture order. Similarly, in this situation the government has established the amount of the proceeds and who received the proceeds. The joint and several liability order simply places the burden of satisfying the order collectively on Tricario, Giardiello, Gopman and Rubin. There is no question that the monies paid to the conduit corporations are forfeitable proceeds: joint and several liability in this context is simply a collection device. Cf. Conner, supra, 752 F.2d at 577 (government's obligation to trace goes to collectibility rather than to type of interest forfeitable).
Third, we reject the notion that joint and several liability on a forfeiture is inconsistent with traditional concepts of criminal law and individual responsibility. To begin with, the criminal law does recognize vicarious liability in certain circumstances. For example, a co-conspirator can be punished for a substantive offense committed by one of his co-conspirators so long as the offense is reasonably foreseeable and is committed in furtherance of the conspiracy. Pinkerton v. United States, 328 U.S. 640, 647, 66 S. Ct. 1180, 1184, 90 L. Ed. 1489 (1946); United States v. Michel, 588 F.2d 986, 999 [**49] (5th Cir.)., cert. denied, 444 U.S. 825, 100 S. Ct. 47, 62 L. Ed. 2d 32 (1979). The imposition of joint and several liability on a forfeiture is even less theoretically problematic than vicarious liability for a substantive conviction might be because it goes only to the penalty imposed rather than to the individual's criminal liability. In addition, traditional notions of criminal law are not altogether analogous because RICO itself by design is not traditional criminal law: it represents a radical departure from common law notions of liability and punishment in criminal law in a number of respects. n27 See United States v. Russo, 796 F.2d 1443 (11th Cir. 1986); United States v. Cauble, 706 F.2d 1322, 1345 (5th Cir. 1983), cert. denied, 465 U.S. 1005, 104 S. Ct. 996, 79 L. Ed. 2d 229 (1984). In summary, then, we hold that the district court's imposition of joint and several liability for the forfeiture of the proceeds funneled through the conduits was not improper.
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n27 In fact, criminal forfeiture itself, regardless of how applied, was largely unknown in the United States prior to the enactment of the RICO forfeiture provision. See United States v. Cauble, supra, 706 F.2d at 1345 (5th Cir. 1983).
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Finally, and perhaps most importantly, these four appellants have failed to demonstrate that imposition of joint and several liability is in any way unfair. The district court did not arbitrarily apportion the forfeiture amount among the four defendants; rather, it left for the time being the matter [*1509] of precise apportionment to the defendants themselves.
4. Tricario, Giardiello, Gopman and Rubin -- forfeiture for conspiracy conviction
Tricario, Giardiello, Gopman and Rubin also argue that forfeiture can be ordered only in connection with a substantive RICO violation, not in connection with a conspiracy conviction. They argue that, since conspiracy does not require proof of a substantive violation of the act, it is inappropriate to impose forfeiture because the government has not proven that the defendants actually received proceeds from the RICO violation -- that is, from the agreement. They argue that an agreement alone logically cannot have proceeds.
The language and legislative history of the statute plainly indicate that Congress intended to punish a conspiracy to violate RICO with the same tools it made available to punish substantive violations. RICO's [**51] penalty provision, 18 U.S.C.A. § 1963(a), provides that each of the three penalties for a RICO violation, imprisonment, fines, and forfeiture, may be imposed for a violation of "any provision of section 1962." The conspiracy provision is found in Section 1962 in subsection (d). Furthermore, the legislative history expressly provides that "Subsection (d) [of section 1962] makes conspiracy to violate (a), (b) or (c) [of section 1962] equally subject to the sanctions of sections 1963 and 19