COUNSEL: Colleen P. Cassidy, The Legal Aid Society, New York,
New York, for Defendant-Appellant John F. Long.
Lawrence M. Stern, New York, New York, for Defendant-Appellant John S.
Mahoney.
Joan McPhee, Assistant United States Attorney for the Southern District
of New York (Otto G. Obermaier, United States
[**2] Attorney
for the Southern District of New York, Jonathan Rosenberg, Assistant
United States Attorney, of Counsel), for Appellee.
JUDGES: Oakes and Winter, Circuit Judges, and Mukasey, *
District Judge.
* The Honorable Michael B. Mukasey, United States District Judge for the
Southern District of New York, sitting by designation.
OPINIONBY: WINTER
OPINION: [*692]
WINTER, Circuit Judge
Appellants John F. Long and John S. Mahoney were Teamsters officials in
New York City who allegedly misused their offices for private profits.
After a twelve-week jury trial before Judge Edelstein, they were
convicted of participating in and conspiring to participate in a
racketeering enterprise in violation of the Racketeer Influenced and
Corrupt Organizations Act ("RICO"),
18 U.S.C. §§ 1962(c) and (d) (1988), and a variety of other
substantive crimes connected with or arising out of the racketeering
activity.
Appellants raise numerous issues, including errors in instructions to
the jury, improper
[*693]
admission of unsealed surveillance tapes and hearsay evidence on those
tapes, improper admission of expert testimony on organized crime,
insufficiency of evidence
[**3] on
various counts, improper questioning of character witnesses using
hypothetical questions assuming the guilt of the defendants, and
judicial bias. n1 The district court's instructions regarding the
pattern element of RICO, while proper at the time they were given, were
not consistent with an intervening decision of this court and were not
harmless error. We also agree that instructions regarding the testimony
of Long's wife were erroneous and that the district court improperly
admitted prejudicial expert testimony regarding organized crime
families. Finally, the questioning of character witnesses in the form of
hypothetical questions assuming the guilt of the defendants was
improper. Accordingly, we reverse.
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n1 Mahoney also challenges his sentence, arguing that his sentence
enhancement was based on insufficient evidence and that he was denied a
fair hearing on that issue. These claims are mooted by our reversal.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
BACKGROUND
Appellants were indicted in 1988 on charges of participating in a
racketeering
[**4]
enterprise by committing and agreeing to commit numerous crimes between
1978 and 1987. The enterprise alleged was an association in fact
consisting of Long, Mahoney, Jesse David Hyman, Vincent Joseph Rotondo,
and "others to the Grand Jury known and unknown." Both appellants were
charged with conspiring to participate in (Count I) and participating in
(Count II) the racketeering enterprise in violation of RICO, 18 U.S.C.
§§ 1962(c) and (d).
The indictment contained ten other counts alleging substantive offenses,
including extortion, filing false tax returns, perjury and false
statements under oath. Because the claims of error implicate the statute
of limitations and the prejudicial effect of certain rulings, a fairly
detailed description of the evidence is necessary.
The government's proof focused on the criminal activities of Hyman, a
dentist who was convicted of extortion and loansharking in 1985 and
thereafter became the government's key witness in this case. Hyman
testified that he had previous associations with various organized crime
families in Buffalo, paying the families a percentage of profits on
union dental care plans that Hyman set up with the backing
[**5] of the
families. When he moved his criminal activities to the New York area,
Hyman developed a relationship with Rotondo, a member of the
DeCavalcante organized crime family in New Jersey.
In 1979, Rotondo arranged for a contractor, Ben Parness, with whom
Rotondo had an extortionate relationship described
infra, to
introduce Hyman to Long, the Secretary-Treasurer of Teamsters Local 804
in New York City. Hyman indicated to Long that he was a partner of
Rotondo, and Rotondo attended a few meetings between Hyman and Long.
Hyman proposed a dental plan for Long's union and requested that Long
suggest other Teamsters locals that might be interested in dental plans
or pension funds.
Long thereafter introduced Hyman to Mahoney, who was Secretary-Treasurer
of Teamsters Local 808. Hyman reported to Rotondo and Rotondo's superior
John
Riggi, then acting boss of the DeCavalcante family, that Mahoney
was willing to discuss business together. Rotondo responded, "if you
could do it, God bless you. Nobody has been able to move Mahoney up
until now." Hyman told Mahoney that Hyman and Rotondo were partners.
Hyman testified, however, that Mahoney emphasized that he intended to do
business only
[**6] with
Hyman. Hyman shared the proceeds from the resulting criminal activities
with Rotondo and Riggi.
The alleged pattern of racketeering activity,
see
18 U.S.C. §§ 1961(1) and (5), consisted of nine racketeering acts,
five involving Long alone, one involving Mahoney alone, and three
involving Long and Mahoney. n2 All but three of the nine acts occurred
[*694]
outside the limitations period and must, under RICO,
see infra,
be related to at least one of the three acts within the period to be
valid predicate acts.
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n2 Although Mahoney was initially charged with Long in Racketeering Act
Six, the government withdrew the charge as to Mahoney prior to the
conclusion of its direct case.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
Racketeering Act One, which occurred outside the limitations period,
charged Long with receiving at least $ 2,000 in kickbacks in 1981 for
arranging for Teamsters Local 804 to invest funds in Penvest, a pension
fund management company. Hyman testified that he agreed to pay Long a
one percent cash
[**7] kickback
for monies invested by Local 804 in Penvest. After Long gave Hyman a
check for $ 100,000 for Penvest, Hyman gave Long $ 2,000 in cash, or a
two percent kickback, to encourage Long's continuing participation in
the scheme. According to Hyman, eight or nine months later, Long
invested additional Local 804 money with Penvest, and Hyman gave Long $
1,000 in cash.
Racketeering Act Two, also outside the limitations period, charged
Mahoney with receiving kickbacks between April 1982 and February 1983 in
the form of cash and a bank loan in return for investing Local 808 funds
with Penvest. That Act also charged Long with aiding and abetting
Mahoney's wrongdoing by persuading Mahoney to make the investment and by
accepting $ 5,000 from Hyman for vouching for Hyman to Mahoney.
According to Hyman's testimony, Hyman offered Mahoney one percent of the
total of union pension fund money invested with Penvest and assured
Mahoney of making $ 30,000 to $ 40,000 per year. Hyman also testified
that Mahoney had stated that he needed money to renovate a new home.
Hyman said that he would give Mahoney $ 10,000 in cash up front and
enable Mahoney to get a home improvement loan for the balance.
[**8]
When the first investment installment was transferred to Penvest in the
spring of 1982, Hyman gave Mahoney $ 10,000 in cash. Hyman also paid
Long $ 5,000 in cash for introducing Hyman to Mahoney and made cash
payments to Rotondo and Riggi. In addition, Hyman testified that he
arranged for Mahoney to receive a $ 20,000 home improvement loan from
Sterling National Bank n3 and gave Mahoney approximately $ 700 per month
in cash to cover the payments on that loan until February 1983.
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n3 Hyman testified that he arranged for the loan application to be
submitted to a particular loan officer and that he had his company's
lawyer write a letter to the bank to explain away a problem in Mahoney's
credit report.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
Racketeering Act Three, again outside the limitations period, charged
Mahoney with receiving a $ 5,000 cash payment in December 1982 for
agreeing not to remove Local 808 funds from Penvest. Long also was
charged in Act Three with aiding and abetting Mahoney's receipt of the $
5,000 and with receiving $ 2,000
[**9] himself
for his efforts to persuade Mahoney to keep the pension fund money in
Penvest. During the summer of 1982, Local 808 officials had complained
about Penvest's failure to provide financial reports and other
documentation regarding Local 808 pension funds. In the fall, Mahoney
wrote to Penvest requesting that all funds and assets belonging to the
union pension fund be returned. Hyman testified that he contacted Long
and asked Long to help persuade Mahoney not to withdraw the funds. Hyman
testified that on December 6, 1982, he paid Mahoney $ 5,000 in cash and
assured Mahoney that the union would get the financial reports it
needed. Mahoney then indicated that the local would make an additional
investment in Penvest of $ 100,000. Hyman testified that shortly after
this matter was resolved with Mahoney, Hyman gave Long approximately $
2,000 in cash. Penvest received an additional $ 100,000 investment from
Local 808 in early 1983.
Racketeering Act Four, also outside the limitations period, charged Long
with receiving kickbacks in 1981 for persuading an official in Teamsters
Local 277 to invest union pension funds in American Asset Management
Company ("AAMC"), another investment management
[**10] fund.
Hyman testified that in 1978 or 1979 he developed a relationship with
various employees of a New York City brokerage house who
[*695] would
handle stock trading for pension funds managed by AAMC. Hyman and one
broker agreed that they would split the broker's commissions. A one
percent cash "fee" to the union people who assisted Hyman in getting the
funds invested with AAMC would be covered out of the pension fund
management fees. Hyman spoke with Rotondo, Long, and other union
contacts to seek business for AAMC. According to Hyman, Long was
instrumental in getting an officer of Teamsters Local 277 interested in
AAMC, and, when Local 277 placed its pension funds with AAMC, Long
received a $ 2,500 cash payment from AAMC through Hyman.
Racketeering Act Five, also outside the limitations period, charged Long
with receiving money in 1981 for assisting Emgee Pharmaceuticals, Inc.,
to avoid unionization. A principal of Emgee Pharmaceuticals had
contacted Hyman regarding threats from AFL-CIO organizers, and Hyman
sought Long's assistance in resolving the situation. Hyman testified
that he later gave Long cash for appeasing the AFL-CIO organizer and for
agreeing to provide Emgee
[**11]
Pharmaceuticals with a "sweetheart contract" between the corporation and
Local 804.
Racketeering Act Six, outside the limitations period, charged Long with
receiving payments in 1979 and 1980 for assisting the principals of
Bottom Sportswear, Inc., to avoid unionization and picketing. Hyman
testified that he paid Long $ 3,500 for helping Hyman resolve an attempt
at union organization at Bottom Sportswear by arranging for a sweetheart
Teamsters contract in 1979 and for other assistance in 1980.
Racketeering Act Seven, which was within the limitations period, charged
Long with extorting payments from maintenance contractor Parness from
1978 until 1987 for assistance that Long provided in getting Parness's
company a maintenance contract with United Parcel Service ("UPS"), whose
workers were represented by Long's local. Parness, who testified
pursuant to an immunity agreement with the government, stated that in
the mid-1970's he had expressed to his friend, Long, interest in getting
a janitorial contract with UPS. When UPS was seeking to hire outside
contractors, Long told Parness to write to UPS and have his business
placed on the bidding list. Parness's company submitted a bid and
[**12] got a
contract in 1974. According to Parness, his payments to Long ceased when
his company went into bankruptcy in 1976, but another company he owned
took over the UPS contracts and resumed cash payments to Long in 1978.
Parness testified that in 1978 he arranged to put Long's wife, Olga, on
the payroll in a "no-show" job in lieu of the cash payments to Long.
Parness's relationship with Long thus substantially predated the
formation of the racketeering enterprise focusing on Hyman's activities.
Parness testified that he had met Rotondo at a social function and
introduced him to Long. Rotondo then introduced Parness to Hyman, and
asked Parness to introduce Hyman to Long. The government contends that
Long's extortion of Parness became part of the enterprise's racketeering
activity. However, this contention is not heavily supported by the
record. Parness testified that starting in 1978 or 1979 he made cash
payments to Rotondo in connection with a contract Parness's company
obtained at a housing development in Staten Island. Hyman testified that
Long told Hyman about Long's receipt of payments from Parness and
suggested that there was an opportunity to make money by getting
contracts
[**13] for
Parness's company. He also testified that Rotondo stated that Rotondo
and Long had jointly assisted Parness with a labor problem and partly as
a result of this assistance had gotten Rotondo and Rotondo's son-in-law
on Flair Maintenance's payroll. However, there appears to have been no
evidence that Hyman ever acted on Long's invitation to get involved in
the extortion of Parness.
Racketeering Act Eight, within the limitations period, charged Mahoney
with obstructing a federal grand jury inquiry when he appeared before it
on July 14, 1983. The government contends that Mahoney lied to the grand
jury about the
[*696]
events alleged in Racketeering Acts Two and Three.
Racketeering Act Nine, within the limitations period, charged Long with
obstructing justice by making false and misleading statements to a
federal grand jury on May 26, 1983. The government contends that Long
falsely denied to the grand jury that Hyman had offered Long money for
investing union funds in Penvest.
In addition to the racketeering charges, the indictment charged Long and
Mahoney with numerous substantive crimes set out in the margin, n4 that
largely mirrored the charged RICO predicate offenses
[**14] but
also included false tax return charges relating to Mrs. Long's "no-show"
job with Parness.
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n4 Count Three charged Long with extortion in connection with the
payments from Parness to Long and his wife in violation of
18 U.S.C. §§ 1951 and 2. Count Seven charged Long with making false
declarations before the grand jury on May 26, 1983,
see
18 U.S.C. § 1623, and Count Eight charged him with perjury at a 1987
deposition during which he was questioned about whether Hyman had
offered him any inducement to recommend his services to Mahoney,
see
18 U.S.C. § 1621. Counts Nine through Twelve charged Long with
filing false tax returns reflecting salary income for his wife from
Parness's company in 1983, 1984, 1985, and 1986, in violation of
26 U.S.C. § 7206(1). Count Four charged Mahoney with making false
declarations before the grand jury on July 14, 1983,
see
18 U.S.C. § 1623, and Counts Five and Six charged him with perjury
during depositions in 1987 and 1984,
see
18 U.S.C. § 1621.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
[**15]
Long and Mahoney were convicted on the two RICO counts. Long was
convicted on Count Three and Counts Seven through Twelve of extortion,
making false declarations before the grand jury, perjury, and filing
false federal income tax returns. He was acquitted of Racketeering Act
Six, the Bottom Sportswear charge. Mahoney was convicted of making false
declarations before the grand jury (Count Four) and perjury (Count
Five). He was acquitted on the Count Six charge of perjury in a 1984
deposition.
DISCUSSION
1.
The RICO "Pattern" Charge
Appellants argue that the district court's charge on the RICO pattern
requirement, which did not require the jury to find relatedness between
at least two predicate acts, was prejudicial error. We agree. Appellants
were convicted of violating, and conspiring to violate,
18 U.S.C. § 1962(c), which provides:
HN1
It shall
be unlawful for any person employed by or associated with any
enterprise engaged in, or the activities of which affect, interstate
or foreign commerce, to conduct or participate, directly or
indirectly, in the conduct of such enterprise's affairs through a
pattern of racketeering activity . . . .
[**16]
18 U.S.C. § 1962(c) (1988). A "pattern" of racketeering activity is
defined in the RICO statute as requiring "at least two acts of
racketeering activity, one of which occurred after the effective date of
this chapter and the last of which occurred within ten years . . . after
the commission of a prior act of racketeering activity."
18 U.S.C. § 1961(5) (1988).
At the time of trial, the law in this circuit was that the commission of
two racketeering acts furthering a RICO enterprise by themselves
supplied the elements of relatedness and continuity necessary to find a
RICO "pattern."
United States v. Ianniello, 808 F.2d 184, 192 (2d Cir. 1986),
cert. denied,
483 U.S. 1006, 97 L. Ed. 2d 736, 107 S. Ct. 3230 (1987). Judge
Edelstein therefore instructed the jury that it "need not find that
these racketeering acts were related to each other." He stated that the
acts had only to be "in some way related to the activities of the
enterprise." n5 These
[*697]
instructions were the subject of a pertinent objection. Less than a
month after appellants' convictions, this court, sitting
en banc,
overruled
[**17]
Ianniello and held that
HN2
proof of two acts of racketeering activity without more does not
suffice to establish a RICO pattern; that the concepts of
relatedness and continuity are attributes of activity, not of a RICO
enterprise, and that a RICO pattern may not be established without
some showing that the racketeering acts are interrelated and that
there is continuity or a threat of continuity . . . .
United States v. Indelicato, 865 F.2d 1370, 1381 (2d Cir.)
(en banc), cert. denied,
493 U.S. 811, 107 L. Ed. 2d 24, 110 S. Ct. 56 (1989); see also
H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229 109 S. Ct.
2893, 2900-02, 106 L. Ed. 2d 195 (1989). Under
Indelicato and
H.J. Inc., therefore, the government must prove that two
racketeering acts were related to each other ("horizontal" relatedness)
as well as related to the enterprise ("vertical" relatedness)
and
that they resulted in or posed a threat of continuity of the criminal
activity. n6
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n5 The instructions stated:
The government must prove beyond a reasonable doubt . . . that the
defendant conducted or participated in the affairs of the enterprise
through a pattern of racketeering activity. A pattern of
racketeering activity requires that the defendant in question
committed at least two acts of racketeering within ten years of each
other.
You need not find that these racketeering acts were related to each
other. However, the government must prove beyond a reasonable doubt
that either the racketeering acts were in some way related to the
activities of the enterprise or that the defendant in question was
able to commit the racketeering acts solely by virtue of his
position or involvement in the affairs of the enterprise.
[**18]
n6
Indelicato applies retroactively.
See
Griffith v. Kentucky, 479 U.S. 314, 93 L. Ed. 2d 649, 107 S. Ct.
708 (1987).
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
In
United States v. Tillem, 906 F.2d 814 (2d Cir. 1990), and
United States v. Scarpa, 913 F.2d 993 (2d Cir. 1990), we
addressed pre-Indelicato instructions based on
Ianniello where
defense counsel had not objected. In both cases, we held that the
instruction was not plain error calling for a reversal in the absence of
a contemporaneous objection.
See e.g.,
Tillem, 906 F.2d at 824-26. In the instant matter, a timely
objection was made, and we must now decide whether the failure to give
an
Indelicato relatedness instruction was prejudicial error.
The government argues that the charge as given sufficiently encompassed
the relatedness requirement of
Indelicato and therefore was not
erroneous. The government's theory is that because the predicate acts
had to be found to be related to the enterprise under the instructions
given, the jury necessarily found interrelatedness among the acts. We
[**19]
disagree.
Although it may be, as the government argues, that the evidence is such
that a jury could have found the predicate acts to be interrelated, we
have no assurance that it did so, particularly since that instruction
expressly stated that the acts did not have to be related to each other
but only had to be "in some way related to the activities of the
enterprise."
See supra note 5. This plainly did not satisfy the
Indelicato requirements of proof of both "horizontal relatedness"
and threat of continuity of criminal activity.
The horizontal relatedness of the predicate acts is particularly
critical in the instant matter because only three of the alleged
racketeering acts fall within the statute of limitations period and,
HN3under
RICO, each defendant must be convicted of at least one racketeering act
committed within the statutory period.
See
18 U.S.C. § 3282 (1988);
United States v. Persico, 832 F.2d 705, 714 (2d Cir. 1987)
(to prove violation of Section 1962(c), at least one predicate offense
must have occurred within five-year statute of limitations for
noncapital offenses),
cert. denied,
486 U.S. 1022, 108 S. Ct. 1995, 1996, 100 L. Ed. 2d 227 (1988). [**20]
The predicate acts that fall within the statutory period -- Long's
obstruction of justice, Mahoney's obstruction of justice, and Long's
extortion of Parness -- are the most vulnerable to a claim of horizontal
unrelatedness, either to themselves or to the various kickback charges.
Indeed, our recent decision in
United States v. Biaggi, 909 F.2d 662, 685-86 (1990), held as
a matter of law that the requisite RICO pattern could not be proven
simply by showing an offense and a subsequent denial of that offense
alleged as an obstruction of justice. We held that a crime and a denial
of that crime constitute only sporadic rather than continuing criminal
activity. A precise
Biaggi objection -- a single offense followed
by a denial of the offense cannot as a
[*698]
matter of law be a pattern -- was not made in the district court.
However, while the legal claim of insufficiency may have been waived,
appellants preserved their right to a correct charge to the jury on the
relatedness of an offense to a subsequent denial for purposes of proving
a RICO pattern. n7
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n7 Under
Biaggi, it appears that a pattern of racketeering
activity cannot be proven with regard to Mahoney because Racketeering
Acts Two and three, outside the limitations period, involved the same
subject matter as was the basis for the obstruction of justice charge,
which is within the period. As for Long, a pattern finding cannot be
based on a finding of relatedness between the obstruction of justice and
Racketeering Act One, which involve the same subject matter.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
[**21]
The horizontal relatedness of the obstructions of justice to the earlier
crimes was challengeable on other grounds. The obstructions might easily
have been viewed as quintessentially solo acts of self-preservation
rather than as part of, and related to, the extortion and kickback
schemes. In addition, the threat of continuity of the enterprise's
criminal activities posed by the obstructions of justice might have been
deemed by the jury to be minimal or non-existent because a continuation
of those activities in the face of the ongoing investigation would have
been foolhardy. Indeed, except for the Parness extortion, the various
kickback schemes appear to have ceased well before the obstructions of
justice.
Long's extortion of Parness, the evidence of which was barely sufficient
to support a finding of guilt,
see infra note 8, was also
arguably unrelated to the other acts and to the enterprise. Parness was
paying off Rotondo on some matters and introduced Rotondo to Long.
Parness thereafter put Rotondo and Rotondo's son-in-law on the Flair
Maintenance payroll in return for Rotondo's and Long's mutual assistance
with a labor matter. Rotondo then had Parness introduce Long to Hyman
[**22] for
purposes of committing the various racketeering acts that are outside
the limitations period. Long in turn invited Hyman to participate in
getting kickbacks from Parness, although Hyman never availed himself of
that particular opportunity. The Parness extortion thus played a role in
the origin of the enterprise and was regarded by Long and Hyman as
associated with their other kickback schemes, or so a trier of fact
might find. Although sparse, the evidence of horizontal relatedness is
thus legally sufficient in light of the elasticity of the pattern
requirement.
See, e.g.,
United States v. Kaplan, 886 F.2d 536 (2d Cir. 1989),
cert. denied,
493 U.S. 1076, 107 L. Ed 2d 1033, 110 S. Ct. 1127 (1990).
The fact that only three of the alleged Racketeering Acts are within the
limitations period thus eliminates any possibility that the RICO pattern
instruction was harmless. A pattern instruction containing the
horizontal relatedness element was critical in the instant matter.
The RICO conspiracy counts must also be reversed.
HN4A
conspiracy to violate Section 1962(c) requires that some member or
members of the conspiracy engaged in, or agreed to engage
[**23] in, a
pattern of racketeering activity.
See
18 U.S.C. §§ 1962(c) and (d). The erroneous RICO pattern instruction
prevented the jury from validly determining whether the requisite
pattern existed. In addition, although the statute of limitations for
RICO conspiracy does not begin to run until the accomplishment or
abandonment of the objectives of the conspiracy,
see
United States v. Persico, 832 F.2d at 713;
United States v. Bortnovsky, 879 F.2d 30, 36 n. 11 (2d Cir.
1989), erroneous pattern instructions may have caused the jury to
find that the conspiracy continued to within five years of the
indictment. Because the predicate acts within the limitations period
were found to be part of a pattern on invalid instructions, the jury may
also have mistakenly found that those acts were in furtherance of the
conspiracy.
Accordingly, appellants' convictions on the substantive RICO and RICO
conspiracy counts must be reversed.
2.
The Olga Long Instruction
Long contends that the district court improperly instructed the jury
regarding the testimony of his wife, Olga
[*699] Long,
as a witness for the prosecution.
[**24] Mrs.
Long had been subpoenaed to testify before the grand jury, and she
testified at trial that she had signed a cooperation agreement with the
government under which she agreed to testify in exchange for immunity
from prosecution. Her brief substantive testimony related to the Parness
extortion charge and the false income tax filing charges.
In his summation, counsel for Long referred to Mrs. Long's nervous
demeanor on the stand and stated, "Mrs. Long, you saw that nice, nice
lady, good woman, put on the stand by the government. . . . The
government gives her an immunity agreement, puts that lady on the
stand." A few moments later counsel stated of Mrs. Long, "She's put on,
again under an immunity agreement, if she didn't testify she'd be
subject to prosecution . . . ." The court interrupted
sua sponte
and instructed the jury, "You may ignore that last comment. Ignore it
completely. I don't want to make any further comment on that score." The
next morning, the court gave the jury the following instruction, which
had been submitted by the government:
During [Long's counsel's] summation he stated that Ms. Olga Long was
subpoenaed. As you have heard during the trial, Olga [**25] and
John Long are married and as a result of that relationship Olga Long
could not and was not subpoenaed by the government at any time.
Mrs. Long could not be compelled to testify against her husband and
had the absolute right to refuse to testify. Mrs. Long chose to
testify, appeared voluntarily and waived the marital privilege.
Long's counsel immediately objected. At the next recess, he moved for a
mistrial and requested a further charge to the jury indicating that had
Mrs. Long invoked her marital privilege she could have been indicted by
the government. The motion and request were denied. That was error.
We see nothing improper in defense counsel's attempting to deflect the
impact of Mrs. Long's appearance as a witness by arguing that it was a
quid pro quo for her immunization against criminal charges, and
the jury should not have been told to disregard it. Nevertheless, that
ruling alone might amount to harmless error. However, the subsequent
instruction to the jury conveyed the entirely false message that she had
volunteered to testify against her husband even though she could have
freely invoked the marital privilege. The instruction thus suggested
that Mrs.
[**26] Long
was ready and willing to testify against her husband when, in fact, she
was effectively compelled to do so to avoid prosecution and possible
incarceration. Although the jury knew of the cooperation agreement, the
instruction given by the district court invited the jury to disregard
the plain implications of that agreement.
Such an instruction is in no sense harmless. Although the government
contends on appeal that Mrs. Long's testimony was merely "cumulative,"
the substance or credibility of her testimony is only a minor part of
the issue.
HN5The very
fact of a person waiving the marital privilege and testifying against
his or her spouse is itself highly damaging whether or not the testimony
supports the government's case or particular counts in only a marginal
way. Pains should have been taken to enable the jury to evaluate her
appearance fairly. The instruction given had the opposite effect and
affected all the counts against Long. n8
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n8 In addition, the proof of the Parness extortion by Long was not
overwhelming. Parness and an employee of his maintenance company,
Douglas Lea, also testified regarding Long's relationship with Parness.
Viewing the evidence in the light most favorable to the government,
Parness made payments to Long partly out of friendship, partly for help
Long provided in running Parness's business, and partly to get and keep
a lucrative janitorial contract with UPS for that business. Parness
testified that he did not know if Long did anything to ensure that
Parness's company would get the UPS contract and that Parness
unilaterally increased payments to Long when the UPS business increased.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
[**27]
3.
Electronic Surveillance Tapes
Appellants argue that the district court erroneously admitted tapes of
conversations intercepted pursuant to court ordered
[*700]
surveillance of Hyman's office. The error claimed is that the tapes
lacked the requisite judicial seal and were inadmissible hearsay.
We turn first to the issues raised by the absence of a judicial seal.
Pursuant to the procedures mandated in
18 U.S.C. § 2518(8)(a), n9 the recordings had been originally sealed
by court order at the expiration of the surveillance orders. The tapes
then were unsealed by judicial order for use in the Rotondo trial. An
affidavit of FBI Special Agent David Stone indicates that upon
completion of that trial, the tapes were resealed by an FBI agent and
thereafter maintained "in a sealed and secure condition in a
confidential storage area." The tapes were not, however, resealed by
judicial order.
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n9
18 U.S.C. § 2518(8)(a) provides that "immediately upon the
expiration of the period of the [surveillance] order, or extensions
thereof, such recordings shall be made available to the judge issuing
such order and sealed under his directions." That section further
provides:
The presence of the seal provided for by this subsection, or a
satisfactory explanation for the absence thereof, shall be a
prerequisite for the use or disclosure of the contents of any wire,
oral, or electronic communication or evidence derived therefrom. . .
.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
[**28]
Before trial, Long moved to suppress the tape-recorded evidence on the
ground that the recordings had not been judicially resealed following
the Rotondo trial. Judge Edelstein denied the pretrial motion, finding
no statutory requirement of resealing. A month after his ruling, we held
in
United States v. Scopo, 861 F.2d 339, 347 (2d Cir. 1988),
cert. denied,
490 U.S. 1048, 109 S. Ct. 1957, 104 L. Ed. 2d 426 (1989), that there
is a resealing requirement. We stated that
HN6"once the
trial level proceedings to which the unsealing order pertained have
concluded, the tapes should be resealed in order to preserve their
integrity should their admission be sought in another trial."
Nevertheless, the tapes may be admissible. The purpose of the sealing
requirement is to ensure the integrity of evidence obtained by
electronic surveillance by providing judicial supervision to prevent
alteration.
See
United States v. Ojeda Rios, 495 U.S. 257, 110 S. Ct. 1845, 1849,
109 L. Ed. 2d 224 (1990);
Scopo, 861 F.2d at 347. Even after surveillance tapes have
been used in another judicial proceeding, they may not be admitted into
evidence
[**29]
without a judicial seal "or a satisfactory explanation for the absence
thereof,"
18 U.S.C. § 2518(8)(a).
See
Scopo, 861 F.2d at 347. Because it is clear that the tapes
here did not have a judicial seal when they were admitted at trial, we
must determine whether the government has presented a "satisfactory
explanation" for the absence of such a seal.
We believe that the government's failure to obtain a judicial sealing of
the tapes is satisfactorily explained by a "good faith, objectively
reasonable misunderstanding" of the statutory requirements.
Ojeda Rios 110 S. Ct. at 1850. Scopo had not yet been
decided at the conclusion of the Rotondo trial,
see id., and the
government was understandably not alerted to our interpretation of the
statute. Because that interpretation was not obvious on the face of the
statute, we are satisfied that judicial seals were absent because of a
good faith misunderstanding as to the statutory requirements.
However, the integrity and reliability of the tapes must be assured.
Agent Stone's affidavit is extremely cursory, and we believe the matter
to be of sufficient importance to require
[**30] an
evidentiary hearing involving live witnesses where appropriate.
Accordingly, in the event of a new trial, the district court should hold
an evidentiary hearing regarding the chain of custody and integrity of
the tapes. If satisfied that they have not been tampered with and are
otherwise reliable, the court should admit them into evidence.
Appellants also argue that admission of the tape-recorded evidence
violated the hearsay rule because the conversations did not constitute
HN7statements
offered against appellants made "by a coconspirator . . . during the
course and in furtherance of the conspiracy."
Fed. R. Evid. 801(d)(2)(E). Whether a statement was "in furtherance"
of a conspiracy is a question of fact to be determined by the court by a
[*701]
preponderance of the evidence,
see
United States v. Beech-Nut Nutrition Corp., 871 F.2d 1181, 1198
(2d Cir.),
cert. denied sub nom.
Lavery v. United States, 493 U.S. 933, 107 L. Ed. 2d 314, 110 S.
Ct. 324 (1989), and the district court's determination will not be
reversed unless clearly erroneous,
see
United States v. Salerno, 868 F.2d 524, 537 (2d Cir.),
cert. denied,
107 L. Ed. 2d 24, 110 S. Ct. 56 (1989). [**31]
Co-conspirator statements may be found to be in furtherance of the
conspiracy within the meaning of Rule 801(d)(2)(E) if they "prompt the
listener to respond in a way that facilitates the carrying out of
criminal activity,"
United States v. Rahme, 813 F.2d 31, 35 (2d Cir. 1987),
although the listener need not be a member of the conspiracy,
see
Beech-Nut, 871 F.2d at 1199.
The tapes here involved conversations in Hyman's offices at Resource
Capital Corp. In them, Hyman speaks to his secretary, his business
partner, various employees, and others. The conversations concern the
conduct of the alleged enterprise, such as scheduling meetings with Long
and Mahoney, obtaining the loan for Mahoney, discussing means of
obtaining cash for payoffs, and reassuring members of the conspiracy. We
are satisfied that these conversations facilitated the carrying-out of
the conspiracy in question, and the district court's findings were
therefore not clearly erroneous.
4.
Expert Testimony on Organized Crime
Appellants argue that the district court abused its discretion by
admitting expert testimony regarding organized crime. We agree that the
testimony was
[**32]
improperly admitted.
Judge Edelstein ruled that the government's first witness, F.B.I.
Special Agent James Kossler, might testify as an expert on organized
crime families under
Federal Rules of Evidence 702 and
703 n10 and that such testimony was also permissible under Rule 403.
n11 Agent Kossler's testimony described the division of La Cosa Nostra
into families, some of which operated in New York and New Jersey. He
went on to describe the hierarchical structure of such a family,
including the respective roles of "the boss," "the underboss," "the
consiglieri," "capos" and "soldiers." He defined the difference between
"made members" and "associates" and the meaning of "vouching," "sit
downs" and "sweetheart contracts." He stated that organized crime
families engage in gambling, loansharking, theft, fencing and labor
racketeering. Finally, he identified Rotondo as an underboss of the
DeCavalcante crime family.
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n10
Fed. R. Evid. 702 provides that an expert witness may testify as to
"scientific, technical, or other specialized knowledge" where such
testimony "will assist the trier of fact to understand the evidence or
to determine a fact in issue."
Fed. R. Evid. 703 provides:
The facts or data in the particular case upon which an expert bases
an opinion or inference may be those perceived by or made known to
the expert at or before the hearing. If of a type reasonably relied
upon by experts in the particular field in forming opinions or
inferences upon the subject, the facts or data need not be
admissible in evidence.
[**33]
n11
Fed. R. Evid. 403 provides that relevant evidence "may be excluded
if its probative value is substantially outweighed by the danger of
unfair prejudice. . . ."
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
We fail to see how Agent Kossler's testimony assisted the jury either
"to understand the evidence or to determine a fact in issue" as required
by Rule 702.
See supra note 10. The claimed nexus between the
crimes charged and organized crime families appears to be the fact that
Rotondo was a "made member" of the DeCavalcante family and Hyman was an
"associate." Rotondo introduced Hyman to Long so they could arrange the
various kickback schemes and the two "sweetheart contracts." Long in
turn introduced Hyman to Mahoney for the same purpose. In return for
Rotondo's introductions, Hyman shared with Rotondo and his superior,
Riggi, the ill-gotten gains.
We agree that
the fact that Rotondo had contacts in organized
labor as a result of his position in the DeCavalcante crime family and
demanded a fee for his services was relevant background to explain to
the jury how and why he was able to facilitate
[*702]
Hyman's various
[**34]
schemes by introducing him to Long. Hyman, however, could have testified
to that fact, and there was no need to call an expert to explain the
hierarchical structure of organized crime families, their jargon, the
various unrelated criminal activities in which they engage, and so
forth. The sharing of the proceeds from illegal kickback schemes with
those who facilitate them is hardly a unique arrangement found only
where "made members" introduce "associates" to crooked labor leaders.
Indeed, recent highly-publicized scandals in New York City have involved
payments to political leaders in exchange for their services as
facilitators of corrupt schemes.
See
Biaggi, 909 F.2d at 673, 683 (payments to political officials
for "introductions" and for "securing favorable action from other public
officials");
United States v. Friedman, 854 F.2d 535, 550-51 (2d Cir. 1988)
(one percent of proceeds of government contract to political leader who
served as "peacemaker"),
cert. denied,
490 U.S. 1004, 109 S. Ct. 1637, 104 L. Ed. 2d 753 (1989). We do not
believe that
HN8a New York
jury needs expert testimony to understand that those who facilitate or
[**35] broker
kickback schemes may expect a commission from the proceeds. "Sweetheart
contracts" are also not the unique product of organized crime, the term
being a general one used to refer to corrupt collective bargaining
agreements.
See, e.g.
Bauer Welding and Metal Fabricators, Inc. v. NLRB, 358 F.2d 766,
769 (8th Cir. 1966) (sweetheart contracts are "contracts not in the
employees' best interest which are sometimes entered into between
dishonest union officials and management").
Moreover, Hyman's payments to Rotondo, while necessary to invoke his
assistance, were relevant only as background information. Had Rotondo
acted as an unpaid broker on Hyman's behalf, none of the charges against
Long or Mahoney would have been weakened. In fact, the expert testimony
had no probative value with regard to the charges against Mahoney
because he had indicated to Hyman an unwillingness to be involved with
Rotondo, and Rotondo himself had told Hyman that Mahoney had previously
declined to cooperate.
In addition to being only marginally relevant, Agent Kossler's extensive
descriptions of organized crime families were substantially prejudicial.
Although Rotondo played only an introductory
[**36] role
in facilitating Hyman's relationship with Long, calling Agent Kossler as
the first prosecution witness had the effect of implicating Long and
Mahoney as part of a much larger criminal organization and associating
them with all of the sinister aspects and activities of that criminal
organization. It thus operated less to aid the jury than to prejudice
it.
The government relies heavily upon
United States v. Daly, 842 F.2d 1380 (2d Cir.),
cert.
denied sub nom.
Giardina v. United States, 488 U.S. 821, 102 L. Ed. 2d 43, 109 S.
Ct. 66 (1988). In
Daly, Agent Kossler's testimony also
identified organized crime families in the New York area, described
their membership rules and conduct, explained some mob jargon, and
described their infiltration of labor unions by crime families.
Daly
upheld admission of Agent Kossler's testimony as expert testimony and
found no error in the determination that the likely prejudice from such
testimony would not outweigh its probative value.
Id. at 1388-89. In
Daly, the Gambino crime family was
charged as the RICO enterprise,
id. at 1383, and Kossler's testimony was helpful
[**37] to the
jury's evaluation of the evidence regarding that family.