U.S. v. Thorn

• Decision Date: 09 January 2003
• Docket Number: Docket No. 02-1046.,Docket No. 01-1669.
• Citation: 317 F.3d 107
• Parties: UNITED STATES of America, Appellant-Cross-Appellee, v. Joseph P. THORN, Defendant-Appellee-Cross-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

317 F.3d 107

UNITED STATES of America, Appellant-Cross-Appellee, v. Joseph P. THORN, Defendant-Appellee-Cross-Appellant.

Docket No. 01-1669.

Docket No. 02-1046.

United States Court of Appeals, Second Circuit.

Argued: November 5, 2002.

Decided: January 09, 2003.

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Craig A. Benedict, Assistant United States Attorney, Northern District of New York, Syracuse, N.Y. (Joseph A. Pavone, United States Attorney; Thomas L. Sansonetti, Assistant Attorney General, Environment & Natural Resources Division, United States Department of Justice, of counsel), for Appellant-Cross-Appellee United States of America.

L. John Van Norden, Sciocchetti & Saccocio, PLLC, Schenectady, NY, for Defendant-Appellee-Cross-Appellant Joseph P. Thorn.

Before CARDAMONE, MINER, and KATZMANN, Circuit Judges.

KATZMANN, Circuit Judge.

This appeal arises out of the conviction of Joseph P. Thorn ("Thorn") in the United States District Court for the Northern District of New York (Frederick J. Scullin Jr., Chief Judge) of nine counts of violating the Clean Air Act, 42 U.S.C. § 7413(c) (2000), and one count of conspiracy to promote money laundering, 18 U.S.C. § 1956(a)(1)(A), (h) (2000). The government challenges various decisions of the District Court imposing the defendant's sentence, and the defendant cross appeals the District Court's denial of his Rule 29 motion for judgment of acquittal seeking dismissal of the money laundering count. For the reasons that follow, we vacate the sentence imposed and remand for resentencing. We affirm the District Court's denial of the defendant's Rule 29 motion.

Facts and Procedural Background

Thorn was the owner of A+ Environmental Services, Inc. ("A+"), an asbestos abatement company in upstate New York. After a four-week trial, a jury convicted him of nine counts (Counts One to Nine) of violating the Clean Air Act, 42 U.S.C. § 7413(c), and one count (Count Ten) of conspiracy to launder money, 18 U.S.C. § 1956(a)(1)(A)(i), (h). Subsequent to a sentencing hearing on July 18, 2001, the District Court sentenced Thorn, on October 30, 2001,¹ to a total term of sixty-five months incarceration followed by three years supervised release, forfeiture of $939,079.98, and restitution of $299,593.40.

Various state and federal laws apply to the removal of asbestos to protect workers, the public, and the environment. See generally 29 C.F.R. § 1926.1101 (2002); 40 C.F.R. §§ 61.141, 61.145, 61.150, 61.154 (2002); N.Y. COMP.CODES R. & REGS. tit. 12, § 56 (2001). For example, operators of removal projects involving at least 260 linear feet or 160 square feet of regulated asbestos-containing material must notify government authorities prior to commencing the work so that these agencies can monitor for compliance with the law. See 40 C.F.R. § 61.145(a)(1)(i), (b). Workers must construct containment areas and set up negative air ventilation and filtration systems at the work site, precautions that are to remain in place until laboratory analysis confirms that the asbestos has been appropriately removed. See 29 C.F.R. § 1926.1101(f)-(g). During removal operations, workers are required to wet the asbestos with amended water² to prevent the release of asbestos fibers into the air and to wear respirators and protective clothing to protect themselves. See id. § 1926.1101(g)-(i). Workers also must go through a decontamination unit before they are permitted to leave the containment area. See id. § 1926.1101(j)(1)(i). Removed asbestos must be kept wet, appropriately sealed, and transported to landfills specifically licensed to dispose of asbestos. See 40 C.F.R. §§ 61.145(c)(6)(i), 61.150. Accredited laboratories collect and analyze samples of the air before, during, and after the project and monitor worker exposure during the project. See 29 C.F.R. § 1926.1101(f).

The government presented the following evidence at the trial and sentencing hearing.³ A+ employed approximately 700 people on abatement projects from approximately 1990 to 1999; the average time spent on friable⁴ asbestos projects by these workers was fifty to sixty percent; thirty to forty percent of these workers did not use respirators; ninety percent of these workers smoked cigarettes; and the core group of A+'s workers worked an average of two to five years, and some worked up to eight years.

The government argues that from 1990 to 1999, Thorn directed his workers to violate the rules and regulations governing the removal of asbestos at in excess of 1,100 separate facilities, including commercial, public, and private buildings. Specifically, while the indictment focused on twenty-two particular projects between 1995 and 1999, the government presented evidence both at trial and at the sentencing hearing of at least 108 additional projects (for a total of at least 130 projects between 1995 and 1999) and over 1,000 private residential projects from 1990 to 1999. Although Thorn assured customers in writing that all abatements would be completed in compliance with the law, the projects often violated many state and federal laws.

The government's evidence depicted Thorn's scheme to defraud as follows. First, he or a supervisor would submit a low bid proposal, which assumed cost savings from illegal shortcuts. Once A+ won the bid, Thorn had his office manager send a contract through the mail, promising full compliance with all applicable laws. Often Thorn directed employees to prepare the required project notification for the file but not to send it to the relevant regulatory agencies (so that in case of discovery, he would feign clerical error), thus decreasing the chance of a regulatory inspection. Thorn then directed workers to perform "rip-and-run" or "rip and skip" abatements, meaning that workers quickly ripped asbestos from pipes with little or no containment, resulting in the release of significant quantities of asbestos fibers into both the work area and other areas of the building. A+'s failure to use required negative air pressure and filtration systems at the abatement sites exacerbated the harm from such rip-and-run practices.

Thorn engaged purportedly independent laboratories and air monitoring companies as crucial elements of the scheme. These laboratories assisted him in falsifying "final air clearances" (which represented that the asbestos had been completely removed from each site) and "OSHA personals" (which reported that worker exposure levels had been below OSHA maximums). A+ falsified respirator fit test results and maintained a computer file labeled "Fraud" to generate falsified reports stating that workers had received required medical clearances. These false reports, as part of project close-out packages, were then sent by A+ through the United States mail to reassure customers that the abatements had been successfully completed in full compliance with the law.

Upon receipt of these packages and assurances, clients then, without knowledge of the violations, paid A+ for its services. Thorn testified that his business "grew almost geometrically each year." Office manager Dawn Dayter testified that the funds obtained from illegal projects were used to "finance the next project" as well as to pay office expenses. Craig Ingalls, a former A+ employee, similarly explained that "the money obtained from illegal projects was used to continue and expand the business and perform additional illegal work."

There was testimony that visible emissions of asbestos fibers were released into the air during many if not all projects, and several projects, as a result of the violations, resembled an indoor "snow storm" or "blizzard" due to the large amounts of asbestos in the air. Further, despite regulations requiring Thorn, as owner, to ensure his workers' compliance with the aforementioned rules, see, e.g., 29 C.F.R. § 1926.1001(e)(5) ("The employer shall ensure that employees do not eat, drink, smoke, chew tobacco or gum, or apply cosmetics in the regulated areas"); id. § 1926.1001(h) (requiring the employer to provide particular respirators to employees); id. § 1926.1001(j) (imposing on employer the duty to insure that employees follow proper decontamination procedures), Thorn did not require his workers to comply with these regulations. In some instances, Thorn failed to supply appropriate replacement filters or sufficient numbers of protective gear for workers who specifically requested these mandated precautions. And Thorn never provided a functioning decontamination unit, as required by law, to enable workers safely and adequately to clean their clothes and bodies before leaving the project sites. The asbestos waste either was sent to landfills dry and without proper bagging, in violation of permits and licenses, or was brought back to A+ where warehouse workers (often very young workers, like the Billetts Brothers, discussed below), without proper protective devices or proper training, were directed to turn the bags inside out (so the labels would not be visible) and simply dump the dry asbestos in trash dumpsters. Those who complained to Thorn about his illegal practices were threatened with being fired and testified that they feared being blackballed from further abatement work.

The government provided detailed exposure evidence for a limited number of the approximately 700 workers employed by Thorn during the scheme. For example, the District Court heard evidence concerning two brothers, Angelo and Jeremy Billetts. Thorn hired Angelo at the age of fourteen to cut A+'s grass and do other maintenance projects, but almost immediately Thorn directed him to cut open and illegally dump bags of friable asbestos into dumpsters. This Angelo did on a daily basis for approximately nine months for about ninety percent of each work day. During this work he became "covered with substantial quantities" of loose friable asbestos. With "visible asbestos all over [his] clothes," he requested...