U.S. v. Scotti

Decision Date10 February 1995
Docket NumberNos. 51,D,633,s. 51
Citation47 F.3d 1237
PartiesUNITED STATES of America, Appellee, v. John SCOTTI, Defendant-Appellant. UNITED STATES of America, Appellant, v. Robert RODRIGUEZ, Defendant-Appellee. ockets 93-1811, 94-1008.
CourtU.S. Court of Appeals — Second Circuit

Felix T. Gilroy, Staten Island, NY, for defendant-appellant John Scotti.

Joseph Nocella, Asst. U.S. Atty., E.D.N.Y., Brooklyn, NY (Zachary W. Carter, U.S. Atty. and Peter A. Norling, Asst. U.S. Atty., of counsel), for the U.S.

Roger Bennet Adler, P.C., New York City (Karen Bennett, of counsel) for defendant-appellee Robert Rodriguez.

Before: MESKILL, MAHONEY, and WALKER, Circuit Judges.

WALKER, Circuit Judge:

Following a trial in the Eastern District of New York, a jury found defendant John Scotti guilty of all nine counts on which he was indicted: conspiracy to make extortionate extensions of credit, 18 U.S.C. Sec. 892(a); conspiracy to use extortionate means to collect extensions of credit, 18 U.S.C. Sec. 894(a)(1); making extortionate extensions of credit, 18 U.S.C. Sec. 892(a) (three counts); and knowing participation in the use of extortionate means to collect extensions of credit, 18 U.S.C. Sec. 894(a)(1) (four counts). The jury also found defendant Robert Rodriguez guilty of the two counts on which he was indicted: conspiracy to use extortionate means to collect extensions of credit, 18 U.S.C. Sec. 894(a)(1) (Count Two of the Superseding Indictment), and knowing participation in the use of extortionate means to collect extensions of credit, or aiding and abetting the same, 18 U.S.C. Secs. 894(a)(1), 2 (Count Seven).

After the verdicts were returned, the district court (Eugene H. Nickerson, Judge ) granted Rodriguez's motion under Rule 33 of the Federal Rules of Criminal Procedure for a new trial on both Count Two and Count Seven. Judge Nickerson denied motions by Scotti for a judgment of acquittal or a new trial, entering judgment against him on all counts and sentencing him to 78 months of incarceration, a term of supervised release, a fine, a special condition of probation, and an order of restitution. The government appeals from the district court's order granting Rodriguez a new trial, and Scotti appeals from his convictions and sentence.

I. BACKGROUND

The government's case portrayed the defendant John Scotti as an extortionist progressively tightening his grip on his debtor, Gary Gough, and Gough's family, with the aid of co-defendant Robert Rodriguez. As the 1980's drew to a close, Gough was trapped in a life of gambling, frequenting massage parlors, consorting with prostitutes, and abusing cocaine. These expensive habits could not be maintained with the income he drew as a part-owner of and limousine dispatcher at Staten Car Service in Staten Island, New York, and soon enough a loanshark drifted into this sea of drugs, vice, and fast living. In 1988, on the advice of Charlie Trammaci, a Staten Island deli owner, Gough turned to Scotti to bankroll his excesses. Over the next two years, Gough borrowed $9,000 from Scotti at an interest rate of 4% per week. Trammaci and Scotti paid regular visits to Gough to collect the money. When Gough slipped behind on his weekly payments, Scotti threatened to break his legs and kill him.

In December, 1990, Gough and Anthony Esposito, Gough's uncle and a co-owner of the car service, jointly borrowed $7,000 from Scotti for their business. The two hoped to repay that sum, plus interest of $1500, almost immediately with an expected benefit check from a life insurance policy held on Gough's mother, who had recently died. When the insurance check was slow in arriving, Scotti threatened to burn down Esposito's house. Scotti, with Trammaci at his side, also stormed into Gough's office and struck him in the mouth while he was speaking with a customer on the phone. Some months later, Scotti accosted Gough again, punching him approximately six times in the face and reissuing threats to break his legs and kill him if payments were not made. Gough testified that he paid Scotti approximately $50,000 from 1988 to mid-1991.

Unsated by Gough's payments, Scotti turned to John Egnat, Gough's cousin and the third co-owner of Staten Car Service. In April of 1991, Scotti demanded of Egnat $23,000 to cover the outstanding principal and interest on Gough's and Esposito's $7,000 loan. When Egnat protested that he had never borrowed money from Scotti, Scotti threatened to break Egnat's legs and burn down Egnat's house with his elderly mother inside. After the car service went out of business in July of 1991, Egnat arranged to refinance his house in an effort to come up with the funds. When Egnat informed Scotti in September that the refinancing would yield $15,500, Scotti announced that the debt was now $70,000. But being, in his own words, "a nice guy," Scotti reduced the debt to $50,000, and promised he would find someone to arrange a second mortgage for Egnat. That someone was defendant Robert Rodriguez, a licensed mortgage broker.

In October, 1991, Scotti brought Rodriguez over to Egnat's house and instructed Egnat to supply Rodriguez with the necessary paperwork for taking out a second mortgage. Egnat repeatedly told Rodriguez about Scotti's threats, the fact that he had never borrowed money from Scotti, and his doubts about taking a second mortgage. Rodriguez replied that he did not want to know about such things and was merely going to assist him in obtaining a mortgage.

On January 7, 1992, Scotti, Rodriguez, and Egnat met at Egnat's house. Egnat paid Scotti the $15,500 from the refinancing, and, in Scotti's presence, signed the application for the second mortgage that Rodriguez had brought with him. Two months later, Egnat met with Rodriguez and Rodriguez's wife, a loan officer at Arbor National Mortgage, to complete the application. In filling out the application, Rodriguez's wife inflated the monthly income Egnat earned from a rental property and falsely stated that the purpose of the mortgage was for "retirement investment."

After the application was submitted, an appraiser came to the Egnat home, but Egnat refused to let him in. When Scotti learned of this, he told Egnat that he would burn Egnat's house down. At this point, Egnat turned for help to the Federal Bureau of Investigation. With the FBI's assistance, Egnat began recording his conversations with Scotti and Rodriguez. Those recordings reveal that Rodriguez kept Scotti informed throughout of the status of the mortgage application and that on one occasion Rodriguez had Scotti hand-deliver necessary papers from the bank to Egnat. However, in these recorded conversations, Rodriguez persistently rebuffed Egnat's efforts to tell him about Scotti's threats. Other than once informing Egnat that his "best bet [was] to ... get it over with," Rodriguez voiced no opinion on the matter, responding repeatedly that he did not want to get involved or know anything. On July 15, 1992, the FBI arrested Scotti, and on January 19, 1993, the government filed a superseding indictment against both Scotti and Rodriguez.

In his defense, Scotti asserted that he was innocent of all charges, that he advanced Gough and Esposito cars and money pursuant to a specific understanding that he would eventually become a partner in the car service, that he never used or threatened violence to force repayment, and that he was a victim of false accusations by Egnat as part of a scheme to avoid repaying Scotti a legitimate debt. Rodriguez's defense was that he provided Egnat with mortgage brokering services after an introduction from Scotti. He testified that he did not know Scotti to be a violent person, that he never entered into an agreement to help Scotti collect a debt from Egnat, and that Egnat did not even mention Scotti's alleged threats until July 13, 1992, only two days before Scotti's arrest.

After a six-day trial, the jury rendered guilty verdicts against both Scotti and Rodriguez on all counts on which they were charged. However, Judge Nickerson granted Rodriguez a new trial on both the conspiracy and substantive counts of 18 U.S.C. Sec. 894, Counts Two and Seven respectively, on the belief that the instruction to the jury on conscious avoidance misstated the requirement of knowing participation in the use of extortionate means to collect an extension of credit. The government appeals from the order granting a new trial to Rodriguez, and Scotti appeals from his conviction and sentence.

II. DISCUSSION
A. Grant of New Trial to Rodriguez

The government contends that the district court erred in granting Rodriguez's motion for a new trial after the jury returned verdicts of guilty on both Count Two and Count Seven. We review the district court's decision to grant a new trial for abuse of discretion. United States v. Sanchez, 969 F.2d 1409, 1414 (2d Cir.1992).

1. Instruction on Principal Liability under 18 U.S.C. Sec. 894(a)(1)

The district court granted Rodriguez a new trial because it feared that its jury instructions misstated an element of the substantive offense under Sec. 894(a)(1). Under that statute, "[w]hoever knowingly participates in any way, or conspires to do so, in the use of any extortionate means (1) to collect or attempt to collect any extension of credit" is guilty of a criminal offense. 18 U.S.C. Sec. 894(a). "Extortionate means" is defined as "any means which involves the use, or an express or implicit threat of use, of violence or other criminal means to cause harm to the person, reputation, or property of any person." 18 U.S.C. Sec. 891(7).

The jury instruction that prompted Judge Nickerson to order a new trial was a "conscious avoidance" charge on the element of "knowingly participates" under Sec. 894(a)(1). It is the rule of this circuit that when knowledge is an element of an offense, trial courts may give a conscious avoidance charge if the evidence would permit a rational juror to conclude that...

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