United States v. Crisona

• Decision Date: 25 September 1969
• Docket Number: No. 624-627,Dockets 33130-33133.,624-627
• Citation: 416 F.2d 107
• Parties: UNITED STATES of America, Appellee, v. Frank CRISONA, Anthony DeLyra, John DeLyra, and Frank Lloyd Parks, Defendants-Appellants.
• Court: U.S. Court of Appeals — Second Circuit

416 F.2d 107 (1969)

UNITED STATES of America, Appellee, v. Frank CRISONA, Anthony DeLyra, John DeLyra, and Frank Lloyd Parks, Defendants-Appellants.

Nos. 624-627, Dockets 33130-33133.

United States Court of Appeals Second Circuit.

Argued May 23, 1969.

Decided September 25, 1969.

COPYRIGHT MATERIAL OMITTED

Maurice Edelbaum, New York City, for appellant Crisona.

James M. La Rossa, New York City, for appellant Anthony DeLyra.

Joshua N. Koplovitz, New York City (Koplovitz and Fabricant, on the brief), for appellant John DeLyra.

Eugene J. Moran, New York City, for appellant Parks.

James D. Zirin, Asst. U. S. Atty. (Robert M. Morgenthau, U. S. Atty. for the Southern District of New York, Kevin J. McInerney, Elkan Abramowitz, Asst. U. S. Attys., on the brief), for appellee.

Before LUMBARD, Chief Judge, FEINBERG, Circuit Judge, and TIMBERS, District Judge.^*

FEINBERG, Circuit Judge:

This appeal is from four judgments of conviction entered in the United States District Court for the Southern District of New York on December 11, 1968, after a four week trial before Thomas F. Murphy, J., and a jury. Defendant Frank Crisona was found guilty on ten counts covering violation of the wire fraud statute, 18 U.S.C. § 1343, inducing interstate travel in execution of a fraud and interstate transportation of the proceeds of a fraud, 18 U.S.C. § 2314, and conspiracy, 18 U.S.C. § 371. Defendants Anthony and John DeLyra were found guilty on substantially similar counts and also on one count of mail fraud, 18 U.S.C. § 1341. Frank Lloyd Parks was convicted of a total of seven counts for wire and mail fraud, interstate travel in execution of a fraud, and conspiracy. The first three defendants were each sentenced to three years, and Parks to one year, imprisonment on all counts to run concurrently. Prior to trial two other defendants, Dominic C. Lonardo and John Martin Neiman, pleaded guilty to one and 17 counts, respectively, and subsequently Neiman testified as a government witness.

I. THE CONSPIRACY

The indictment charged all four appellants, Neiman and Lonardo with conspiring to defraud and actually defrauding many individuals and corporations. While only Parks challenges the sufficiency of the voluminous evidence developed at trial, a summary of the numerous and complex financial dealings which underlie appellants' convictions is helpful in considering the various legal issues raised. The evidence introduced by the Government allowed a jury to find the following.

Crisona, a former Assistant District Attorney for Queens County, New York, first met Neiman, whom the Government aptly describes as "a professional confidence man with a long criminal record," in October 1964, when they engaged in a joint attempt to salvage financially a summer camp in which Crisona had an interest. The attempt failed, and the camp was lost, leaving Crisona $15,000 in debt to a loan shark, but the business association between the two men survived. In the summer of the following year, Neiman entered into negotiations with one William Sikora, a New Jersey real estate operator, to provide Sikora with a commitment for a $3,000,000 loan, and persuaded him to pay a security deposit of $10,000 in the form of a check made out to Crisona, as attorney, to be held in escrow pending the funding of the loan. Crisona promptly cashed the check and split up the proceeds between himself, Neiman and Crisona's loan shark. Apparently during this period Crisona first met Anthony DeLyra, with whom Neiman had done business in the past, and Parks, a former stockbroker who used an office in the same building as John DeLyra. Anthony was introduced to Sikora as an individual who would advance sums for the latter's loan and Parks was presented to him as the stockbroker who was going to handle the financing. Evidently no loan was ever consummated.

In October 1965, Neiman and the DeLyras somehow came into possession of a stolen $9,200 cashier's check payable to a recently deceased woman named Mary McCarthy. Pursuant to Crisona's suggestion a joint checking account in the names of Mary McCarthy and a fictitious John O'Brien was opened in a branch of the Franklin National Bank and the check deposited in it. Within the next few days Crisona signed two checks in the name of John O'Brien for $5,600 and $3,500 and he and Neiman then cashed them at the bank and divided up the proceeds among themselves and the two DeLyras. The bank, however, discovered that Mary McCarthy was dead. The check was dishonored, and Crisona was notified that he would be held responsible for the $9,100 overdraft.

In November 1965, Neiman, Crisona and the DeLyras, who were apparently all in debt, and Parks, who was unemployed, devised their basic scheme of utilizing a foreign corporation owned by John DeLyra, Columbia Resources, Ltd., to issue real estate financing commitments. To make the corporation appear financially sound, they prepared a false financial statement showing a net worth of $11,000,000,¹ which was submitted to Dun and Bradstreet as a basis for a credit rating, along with false résumés of the backgrounds of four officers of Columbia, two of whom were pseudonyms for Neiman and Anthony DeLyra. Utilizing this false statement, and the excellent Dun and Bradstreet rating they eventually received, and variously presenting themselves as officers of the corporation, often under assumed names, the defendants thereafter used Columbia Resources as a front for obtaining advance fees from various individuals and corporations in return for letters of intent or commitments to secure real estate financing. In most instances the advance was presumably to be held in escrow by Crisona, as attorney, pending the funding of the loan, but was in fact immediately distributed among Neiman and the defendants. None of the Columbia loan financing was ever consummated.

The specific transactions of this nature which form the basis of the various counts on which appellants were indicted may be outlined briefly, as they all follow substantially the same pattern.

(1) Kline. In November 1965, Neiman was referred to a Boston real estate developer, Sydney Kline, to whom he sent a copy of the false financial statement and offered a commitment for a $700,000 first mortgage to finance a nursing home which Kline planned to construct. A man named Graeber, acting for Neiman, went to Boston and attempted to secure a two per cent standby fee or deposit from Kline in return for a commitment letter. At Graeber's suggestion Kline spoke on the telephone to Crisona, who assured him that Columbia was a reputable firm which he had often represented and that Kline's check for the advance fee would be held in escrow pending completion of the transaction. Kline then wrote out a check for $13,500 to Crisona which Crisona, when he received it, promptly cashed and distributed among his colleagues.

In late December, a second commitment of $125,000 for another nursing home was arranged with Kline after a purported appraisal of the property by John DeLyra, under a false name, who elicited another standby fee check for $2,500 which was again supposed to be held in escrow. When Kline became suspicious of the lack of progress in the financing he called Crisona and asked for his money back, but was told that it had been turned over to Columbia.

(2) Sunrise Mountain Corp. In December 1965, Neiman made contact with A. Earle Brown, the owner of Sunrise Mountain, a development corporation which was in Chapter XI reorganization; Brown was seeking a $3,000,000 loan for a real estate project in Las Vegas. At initial meetings between Brown, Neiman — under an assumed name — and Crisona, it was agreed that Sunrise would pay a $30,000 standby fee to Columbia for a $3,000,000 loan commitment. Crisona assured Brown of the corporation's reliability and its ability, based on the false financial statement, to fund the loan. Subsequently, Brown and his attorney, Richard Crake, met with Crisona, Neiman and Parks, who was introduced as a Columbia officer who acted as a West Coast liaison man. Crisona again made assurances of his own and Columbia's respectability and it was agreed that out of the standby payment Crisona would receive a $7,500 attorney's fee with the balance being placed in escrow. As the date when the funding was scheduled drew near, however, Crisona persuaded Brown and Crake, who was co-escrowee with Crisona, to release the escrow fund, finally assuring them that the closing of the funding would take place the same day. Crisona immediately deposited the escrow check and distributed the proceeds, using a portion of them to pay off the overdraft caused by the McCarthy-O'Brien transaction. He never showed up for the closing, which continued to be repeatedly postponed with a variety of excuses. During January 1966, Crake had a number of telephone conversations with Neiman, Crisona, and Parks, at least some of which he tape recorded. On January 19, Crake and Brown finally went to the office of the United States Attorney for the Eastern District of New York and requested an investigation of Columbia.

(3) Tuller. At approximately the same time, Neiman and Anthony DeLyra, again using false names, obtained a check for $8,500, in return for a letter of intent to obtain a $850,000 loan for a Julliard Tuller of Silver Spring, Maryland. As usual, the closing of the loan was repeatedly delayed and as a result, the mortgage on Tuller's property was foreclosed at a loss of $300,000.

(4) Menlove. In February 1966, Parks and Neiman persuaded Roy Menlove, a Salt Lake City motel owner, to put up an advance fee of $11,000 for a prospective $1,100,000 loan by Columbia, after Parks had conducted an "appraisal" of Menlove's property and Menlove had been furnished a copy of the Dun and Bradstreet report based on the false financial statement on Columbia. The loan closing was twice adjourned and never took place.

(5) Fazio. In return for a letter of intent to provide...