551 F.2d 902 (2nd Cir. 1977), 530, United States v. Rastelli

Docket Nº:530, 539, 818, Dockets 76-1350, 76-1408, and 76-1410.
Citation:551 F.2d 902
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. Philip RASTELLI et al., Defendants-Appellants.
Case Date:March 18, 1977
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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551 F.2d 902 (2nd Cir. 1977)

UNITED STATES of America, Plaintiff-Appellee,

v.

Philip RASTELLI et al., Defendants-Appellants.

Nos. 530, 539, 818, Dockets 76-1350, 76-1408, and 76-1410.

United States Court of Appeals, Second Circuit

March 18, 1977

Argued Jan. 17, 1977.

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Mervyn Hamburg, Atty., U. S. Dept. of Justice, Washington, D. C. (David G. Trager, U. S. Atty. for the Eastern District of New York, Brooklyn, N. Y., on the brief), for plaintiff-appellee.

William Sonenshine, Brooklyn, N. Y. (Evseroff & Sonenshine, Brooklyn, N. Y., Ernest J. Peace, Mineola, N. Y., on the brief), for Petrole and De Stefano.

Roy M. Cohn, New York City (Saxe, Bacon & Bolan, New York City, John F. Lang, Ronald F. Poepplein, New York City, of counsel), for Rastelli.

Before LUMBARD, FEINBERG and MULLIGAN, Circuit Judges.

MULLIGAN, Circuit Judge:

This is an appeal from judgments of conviction entered after an eleven-day jury trial before the Hon. Thomas C. Platt, Jr., in the United States District Court for the Eastern District of New York. Appellants Carl Gary Petrole, Anthony De Stefano and Philip Rastelli were convicted on April 23, 1976 of one count of restraining trade in violation of the Sherman Act, 15 U.S.C. § 1, one count of conspiracy to interfere with commerce by extortion, 18 U.S.C. §§ 1951 and 2, and two counts of interfering with commerce by extortion in violation of the Hobbs Act, 18 U.S.C. § 1951. De Stefano was also convicted on an additional count of violating 18 U.S.C. § 1951. The judgments of conviction are affirmed.

The appellants' racketeering activities were centered in the mobile lunch truck business. The industry consists of individuals who operate trucks especially designed for dispensing beverages and foods. Most of the operators' sales take place at locations,

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such as factories, where a large number of workers can be served during work breaks. The drivers develop their routes independently and when a particular location is considered highly desirable the driver regularly providing the service will often be faced with competition from other lunch trucks. This practice known as "bumping" may lead to a price war between the two mobile food stands. As a result, one of the competitors may relinquish his spot or both may find that they are able to share the stop. The lunch truck operators either supplied themselves or purchased their supplies from commissaries which aggressively competed for their business.

In 1966, largely through the efforts of Petrole, the Workman's Mobile Lunch Association was created and received its corporate charter from the State of New York. Petrole became its president. In its first year there were 48 members who paid an initial membership fee and weekly dues, which started at three dollars per truck, and were later increased to as much as $10. Although at association meetings there was some discussion of such matters as discount purchasing, group insurance, and discounts on charges for repairing the trucks, none of these benefits ever materialized.

Petrole, after serving as president for approximately two years, resigned and was replaced by Louis Rastelli, 1 the nephew of appellant Philip Rastelli. In 1970 De Stefano was elected secretary-treasurer of the association. Philip Rastelli has no formal relationship with the trade group. The government, however, established that he indirectly controlled the association and shared in the proceeds that were extorted from the suppliers of the lunchmen by Petrole and other association officials. The defendants were engaged in classic racketeering activities. Kickbacks, computed as a percentage of the amount of purchases made by association members, were demanded from suppliers. It was understood that failure to make these payments would result in the loss of member customers. In addition, through persuasive demonstrations of force and implicit threats of violence, appellants convinced unfavored lunch truck operators to cease bumping at lucrative stops and to surrender these profitable locations to operators protected by the appellants.

I

The appellants argue that there was insufficient evidence to sustain their convictions on the Hobbs Act counts. In order to prove such violations the government must establish extortion. 2 The defendants' conduct in this case in intentionally creating in their victims a fear of economic loss if the victims failed to "kickback" constituted extortion. United States v. Kramer, 355 F.2d 891, 897 (7th Cir.), cert. granted in part and remanded for resentence, 384 U.S. 100, 86 S.Ct. 1366, 16 L.Ed.2d 396 (1966); United States v. Postma, 242 F.2d 488, 492 (2d Cir.), cert. denied, 354 U.S. 922, 77 S.Ct. 1380, 1 L.Ed.2d 1436 (1957). Appellants contend that they did not place the victims in fear because the relationship between the defendants and their victims was amicable. However, "fear may be present even if confrontations

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between the victim and the alleged extorter appear friendly". United States v. DeMet, 486 F.2d 816, 820 (7th Cir. 1973), cert. denied, 416 U.S. 969, 94 S.Ct. 1991, 40 L.Ed.2d 558 (1974). "The fact that relations between the victims and the extorters were often cordial is not inconsistent with extortion. Knowing that they were at the mercy of the (defendants), it is a fair inference that the victims felt that to save their businesses they had to keep the extorters satisfied." United States v. Hyde, 448 F.2d 815, 834 (5th Cir. 1971), cert. denied, 404 U.S. 1058, 92 S.Ct. 736, 30 L.Ed.2d 745 (1972).

Since there was evidence to support the jury finding that fear was present and since the court's charge was clear that "the mere voluntary payment of money or delivery of property unaccompanied by any fear of economic loss would not constitute extortion" we find the argument of...

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