United States v. Pfingst

• Decision Date: 04 April 1973
• Docket Number: No. 424,Docket 72-1998.,424
• Citation: 477 F.2d 177
• Parties: UNITED STATES of America, Appellee, v. Joseph P. PFINGST, Appellant.
• Court: U.S. Court of Appeals — Second Circuit

477 F.2d 177 (1973)

UNITED STATES of America, Appellee, v. Joseph P. PFINGST, Appellant.

No. 424, Docket 72-1998.

United States Court of Appeals, Second Circuit.

Argued January 23, 1973.

Decided April 4, 1973.

Certiorari Denied June 11, 1973.

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Joseph J. Marcheso, New York City (Philip M. Kazin, Morton J. Schlossberg, and Walter I. Nathan, New York City, of counsel), for appellant.

Joseph W. Ryan, Jr., Asst. U. S. Atty. (Robert A. Morse, U. S. Atty., for E. D. New York, L. Kevin Sheridan, Asst. U. S. Atty., and David G. Trager, Sp. Asst. U. S. Atty., of counsel), for appellee.

Before MOORE, HAYS and OAKES, Circuit Judges.

Certiorari Denied June 11, 1973. See 93 S.Ct. 2779.

OAKES, Circuit Judge:

Following a four week trial before a jury and Judge Weinstein in the Eastern District of New York, appellant, Joseph P. Pfingst, who had served as a New York State Supreme Court Justice, was convicted on three of the nine substantive counts of a ten-count indictment. The indictment alleged that, while appellant was a practicing lawyer, he transferred and concealed corporate assets in contemplation of bankruptcy in violation of 18 U.S.C. § 152 and engaged in a conspiracy to do the same, 18 U.S.C. § 371. On each count he was sentenced to three years' imprisonment but with execution suspended as to all but four months, the sentences to run concurrently. On this appeal, Pfingst does not challenge the sufficiency of the evidence against him. Rather, he launches a multifaceted attack on the conduct of his trial, both by the prosecutor and trial judge. While appellant's contentions have in many cases a verisimilitude, upon close scrutiny in the light of the record none of them warrants reversal of his conviction. We therefore affirm.

I. Background.

To understand the reasons we reject appellant's contentions of error requires a somewhat detailed exposition of the evidence. In 1965, when the case begins to unfold, the Evans Dairy business consisted of a group of corporations whose stock was closely held by the Evans family. There were six related corporations dealing with all the different phases of milk production and sale: a company which operated a receiving plan, Chenango Farm Products, Inc. ("Chenango"); a purchasing company which also operated an additional milk receiving plant, W. M. Evans Dairy, Inc. ("W. M. Evans"); a processing and distributing company, Evans Amityville Dairy, Inc. ("Evans Amityville"); two companies which sold directly to retail customers, Woodside Farms, Inc. ("Woodside"), and Half Hollow Farms, Inc. ("Half Hollow"); and a real estate holding corporation that owned the property used by the processing and distributing company, Highground Realty Corporation ("Highground"). The two principal components of the business were W. M. Evans and Evans Amityville.

In 1965 one Ramon N. D'Onofrio, who pleaded guilty to charges similar to those brought against appellant¹ and who was the principal witness against appellant at trial, had been a salesman for and ultimately became a vice president of Evans Amityville. Early in that year D'Onofrio learned that the Evans dairy business was for sale. He was encouraged and advised by Pfingst, at that time a practicing attorney and personal friend, to purchase the business. D'Onofrio, however, could not obtain the necessary credit on his own. By virtue of associating with one Sam Marcus, an experienced and respected dairy man whose credit was excellent, D'Onofrio was able eventually to acquire the Evans dairy business jointly with Marcus from the Evans family, largely for some long-term notes. Pfingst became the lawyer for the purchasing interest in connection with the negotiations that ensued. Upon completion of the purchase, Pfingst became a director of all the corporations, secretary of all of them except Evans Amityville, a minority stockholder of Evans Amityville and Half Hollow, and general counsel to the dairy business. There was evidence, centering around Pfingst's demand for $50,000 legal fees conpensating his work for the purchase, that Pfingst was aware as early as August, 1965, of the poor financial condition of the Evans dairy business. After Marcus and his son discovered that D'Onofrio had drawn checks payable to Pfingst in the sum of $26,500 from Woodside and $20,000 from Evans Amityville, Pfingst kept $10,000 and took a $30,982 mortgage owned by Highground and a $7,500 note from Evans Amityville.

In October, 1965, Sam Marcus died and plans for the rehabilitation of the Evans business accordingly suffered a severe blow. D'Onofrio, who lacked financial resources and managerial experience, could not carry on alone. As a buyer could not be found, D'Onofrio and Pfingst decided to acquire the interest of the Marcus estate in the business and, as the jury could infer, to milk whatever profit could be made before the business went bankrupt. They became, according to D'Onofrio's testimony and corroborating evidence,² 75%-25% partners, acquired the interests of the Marcus estate on February 28, 1966, and refinanced some of the debt of the business by factoring accounts receivable. There was evidence from which it could be inferred that the Evans dairy business was already bankrupt at the time that it was acquired by the D'Onofrio-Pfingst partnership. In April, 1966, milk suppliers refused to extend further credit and total collapse could no longer be avoided. An assignment for the benefit of Evans Amityville creditors was made in state court that same month. Later in the year W. M. Evans and Evans Amityville were adjudicated involuntary bankrupts.

The Government's case was that Pfingst and D'Onofrio, knowing bankruptcy to be both inevitable and imminent, fraudulently moved to skim the cream of the assets of the Evans dairy business for their personal benefit. Two of the steps they took in this regard formed the basis for Pfingst's conviction. The first began on March 15, 1966, when a substantial portion of the major Evans Amityville asset, its wholesale customer business, and the Chenango milk receiving plant were sold to a competitive dairy for $229,000. Fifty thousand dollars of this amount was held by Pfingst in escrow pending completion of certain provisions in the sales contract which he had prepared. The remaining $179,000 was deposited in the Evans Amityville bank account. Three days later $160,000 was transferred from the Evans Amityville account to the W. M. Evans account. Subsequently, on March 21, 1966, a check payable to D'Onofrio for $75,000 and a check payable to Pfingst for $25,000, both marked "for Purchase of Stock," were drawn on the W. M. Evans account. These checks were not drawn according to the usual corporate procedure nor was a purchase of D'Onofrio's or Pfingst's stock by W. M. Evans authorized by corporate resolution. Furthermore, W. M. Evans was in precarious financial position at the time and could ill afford the expenditure. While Pfingst contended that the $25,000 check to him represented payment for legal fees, D'Onofrio testified that the notation "for Purchase of Stock," was pursuant to a scheme devised by Pfingst to make the transfer look like a bona fide stock transfer. The jury convicted Pfingst of fraudulently transferring the $25,000 to himself, although it acquitted him of fraudulently participating in the $75,000 transfer to D'Onofrio.

The other transfer which formed the basis of the counts on which Pfingst was convicted concerns two other checks drawn on the W. M. Evans account and paid for out of the proceeds of the March 15, 1966, sale of the dairy business's assets described above. These checks were for the aggregate amount of $10,600, with $7,950 (or 75 per cent) going to D'Onofrio and $2,650 (or 25 per cent) going to Pfingst.³ The money, according to D'Onofrio's testimony, was to finance a joint venture in a Puerto Rican dairy unrelated to the Exans business, and an accountant corroborated him by his testimony that D'Onofrio and Pfingst wanted him to accompany them to Puerto Rico to look over some dairy books in connection with a "possible purchase." The checks were marked "Dividend, Woodside Farms," but there was evidence that payment of a Woodside Farms dividend by W. M. Evans was "irregular" and unsubstantiated by corporate resolution, and that W. M. Evans needed the cash used for the "dividend" to pay its debts.⁴ The defense did not offer any explanation for this transfer and the jury found Pfingst guilty of fraudulently arranging it for his own and D'Onofrio's benefit.

It is to be noted that on all charges D'Onofrio's testimony was a considerable portion of the prosecution's case against Pfingst. D'Onofrio was involved in many other dealings that were shady, to say the least, and his credibility was a critical issue at trial. Indeed, on the charges of which Pfingst was acquitted the evidence was limited to D'Onofrio's testimony, while on the charges of which Pfingst was convicted, in contrast, documentary evidence and the testimony of other witnesses corroborated D'Onofrio's version of events.

It is important, however, to describe in some detail the unrelated bribery charge brought against appellant in the Eastern District, for it is involved in some of his contentions here. Some nine months after the indictments in the bankruptcy case a grand jury indicted him for the crime of having paid one Frederick R. Fellman, the Babylon, Long Island, town Republican leader, $50,000 in cash in return for that party's nomination in 1968 for the judgeship. The bribery indictment charged that, inter alia, Pfingst traveled and caused D'Onofrio to travel to Switzerland to arrange for the bribe money in violation of 18 U.S.C. § 1952. Fellman, but not D'Onofrio, was indicted for participation in the bribery scheme. Fellman pleaded guilty but Pfingst went to trial.

The bribery trial began one month after the verdict in the bankruptcy...