U.S. v. Zagari
| Decision Date | 17 April 1997 |
| Docket Number | D,Nos. 599,627,s. 599 |
| Citation | 111 F.3d 307 |
| Parties | 27 Envtl. L. Rep. 20,992, 46 Fed. R. Evid. Serv. 1437 UNITED STATES of America, Appellee, v. John J. ZAGARI; Pasquale "Pat" Maselli, aka Pat; Frank Salerno; Frank Trapani, aka Harpo; Angelo J. DiPalo, aka Shorty; Peter Del Cioppo, aka Petey Del; George Merusi; James A. Rogan, aka Jimmy; Raymond E. Ryder; David Zanolini; Morton Wagner, aka Morty, Defendants, Donald Herzog; Alfred Christiansen; * Charles Shay, Defendants-Appellants. ockets 96-1120(L)*, 96-1121, 96-1155. |
| Court | U.S. Court of Appeals — Second Circuit |
Judd Burstein, New York City (Marc Fernich, Burstein & Fass L.L.P., of counsel), for Defendant-Appellant Herzog.
Richard D. Willstatter, White Plains (Green & Willstatter, of counsel), for Defendant-Appellant Shay.
Anthony J. Siano, Assistant United States Attorney, New York City (Mary Jo White, United States Attorney, Guy Petrillo, Assistant United States Attorney, of counsel), for Appellee.
Before OAKES, ALTIMARI and PARKER, Circuit Judges.
The strictures of environmental law lie at the base of this involved criminal appeal; avoiding these strictures, with high profits forthcoming, resulted in the charges brought against the Appellants. Donald Herzog and Charles Shay appeal from judgments of conviction entered respectively on February 20 and 28, 1996, in the United States District Court for the Southern District of New York, Charles L. Brieant, Judge, following a fifteen-week jury trial. 1 Herzog was convicted on one count of violating the RICO statute, 18 U.S.C. § 1962(c), one count of RICO conspiracy, 18 U.S.C. § 1962(d), four counts of wire fraud, 18 U.S.C. § 1343, six counts of money laundering, 18 U.S.C. §§ 1956(a)(1)(A)(i), (A)(ii) and (B)(i), one count of violating the Travel Act, 18 U.S.C. § 1952, three counts of mail fraud, 18 U.S.C. § 1341, one count of tax conspiracy, 18 U.S.C. § 371, and one count of tax fraud, 26 U.S.C. § 7206(2). He was sentenced to concurrent terms of imprisonment, forfeiture of $500,000, a supervised release term of three years on each count, and a special assessment of $900. Shay was convicted on one count of wire fraud, 18 U.S.C. §§ 2 and 1343, and sentenced to 60 months' imprisonment to be followed by two years of supervised release and a $50 assessment.
Appellants Herzog and Shay jointly bring two assertions of error. First, they argue that the district court erred by failing to admit Shay's former lawyer's affidavit to impeach the out-of-court statements attributed to the lawyer. Second, they assert that the Appellee ("the Government") withheld information concerning the insanity of a key prosecution witness in violation of Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963); that the district court improperly denied them a Franks hearing, see Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978), to determine whether the information gained in the course of the Government's surveillance of defendants ought to have been suppressed; and that the alleged Brady material is "newly discovered evidence," the discovery of which warrants grant of a new trial. Brady, 373 U.S. at 84, 83 S.Ct. at 1195.
In addition, Appellants bring independent assertions of error. Shay asserts that his sentence was issued in violation of the ex post facto clause, and thus that two Sentencing Guidelines provisions were improperly applied to him: the "Conscious or Reckless Risk of Serious Bodily Injury" enhancement, and the increase for "Fraud and Deceit Loss." He therefore asks that we vacate his sentence and remand for resentencing. Appellant Herzog first asserts that the trial judge improperly denied his post-trial motion to dismiss Counts Twenty-Seven, Twenty-Eight, and corresponding RICO Act Twenty, for insufficient evidence. He further argues that the court improperly increased his sentence pursuant to three Sentencing Guideline provisions: the two-level "Obstruction of Justice" enhancement, the four-level "Aggravating Role" adjustment, and the three-level "Value of the Loss" calculation.
Although we disagree with the majority of these assertions of error, we remand Shay's sentence for recalculation under the Guidelines in effect in October of 1989, and Herzog's for further evidentiary findings with regard to a) his perjury in the related state civil action, and b) the enhancement for his leadership role.
Prior to December 1988, Herzog, Christiansen and others operated without a permit a large landfill, "Buffalo Farm," in Ancramdale, Columbia County, New York. The Buffalo Farm landfill was closed around December 1988 due to regulatory action by New York State environmental authorities. In order to continue profiting from the dumping of construction and demolition ("C & D") debris, Herzog and his associates, including Pasquale Maselli, 2 began to look for a new landfill.
Charles Shay and his wife owned a parcel of land near Matamoras, Pennsylvania, on the Pennsylvania bank of the Delaware River, just across the river from Port Jervis, New York. The site is immediately south of Interstate 84, which crosses a bridge from Port Jervis to Matamoras. Prior to 1988, Shay had been using a portion of the land as a campground and boat-docking area.
In 1969, during the construction of I-84, the property's previous owner had allowed state highway contractors to excavate a large hole from the property. The hole became partially filled with tree stumps and other organic waste, but there remained a large depression on the property. In 1988, the Shays began construction of a restaurant on the property and needed to fill the depression as part of that project. With the help of a local contractor, Raymond Ryder, Shay arranged with a waste broker named Kelly Wall to bring "clean fill" to the site. 3 Instead of clean fill, however, Wall caused shredded demolition waste, municipal waste, construction debris, and other debris ("C & D debris") to be hauled to and dumped at the site. 4
Apparently, Shay did not consider this to be entirely undesirable. In fact, at some point during this time, Shay's then attorney, Randolph Borden, requested that PADER consider issuing a permit to Shay to use his land as a site for the dumping of C & D debris. PADER responded in the negative, indicating that Shay's property was too close to residential areas and the Delaware River to serve as such a dump site. On October 19, 1988, and December 6, 1988, PADER officials inspected the Shay property and found the landfill material previously dumped by Kelly Wall ("the Wall material") to be environmentally unacceptable. Wall thereafter stopped dumping and abandoned the project.
In January 1989, Donald Herzog, James Rogan and Frank Salerno met with Shay and Ryder and proposed to bring processed C & D to the site. 5 Herzog formed a corporation called Tri-State Land Development, Inc. ("TSLD"), which brought the materials to the site and supervised the work there.
On March 8, 1989, PADER issued an order and assessment of civil penalties, which cited the Shays for the unlawful dumping of the Kelly Wall waste and imposed a $20,000 civil penalty. On March 23, 1989, Herzog, Shay and others met with Pennsylvania regulatory authorities to discuss cleanup of the Matamoras site. Herzog proposed to remove the Wall material and replace it with better quality fill. He provided PADER with a list of safeguards to ensure that the Wall material would be properly removed and that clean fill would be dumped in its place. As no permit was required to dump "clean fill," PADER officials told Herzog, Shay and Ryder that they were free to go forward at their own risk.
In fact, however, the evidence at trial showed that even before they met with PADER on March 23, Herzog and Shay had already opened the landfill and accepted C & D debris. "Dump," or "load," tickets admitted at trial showed that C & D debris was dumped at Matamoras as early as January and February 1989. The dumping apparently stepped up after the meeting with PADER, however, though not on the terms discussed with the officials. From March through July 1989, Herzog, Shay and others arranged for the disposal of vast quantities of untreated C & D debris at the landfill. The dumped materials were not segregated or processed in any way, and included substantial amounts of wood, metal and building fixtures. It appears that, during this period, Herzog, Shay and others sought to accept as much C & D debris as possible at the Matamoras site while eluding scrutiny by PADER, law enforcement and local residents. The dumping of C & D debris often took place at night, in the early morning hours, and on Saturdays, presumably in order to avoid PADER scrutiny. Moreover, rather than being removed entirely from the Matamoras site as promised, much of the Wall material was moved to a large pit on the Shay property while the remainder was taken down the road to another unauthorized location known as the "St. Onge site."
In addition to misrepresenting their actions to PADER, the Appellants falsely represented to private waste haulers that they had a permit to operate the Matamoras landfill and to receive C & D debris. The receipt of such debris was, however, conducted in a suspicious manner. Waste haulers and garbage transfer station operators who used the landfill were asked to pay cash; Herzog offered cash discounts and refused to allow certain haulers onto the site unless they first paid in cash. Some of the cash and checks received were deposited by Herzog into a TSLD bank account, but much of the cash was not deposited and was never recorded on TSLD's books and records.
Although the Matamoras landfill operated for only six months, the proceeds of the illegal operation totaled approximately $3 million, of which Shay received a one-sixth cut. In addition, Herzog and his co-defendants...
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