U.S. v. Ciampaglia, s. 79-1269
| Citation | 628 F.2d 632 |
| Decision Date | 12 March 1980 |
| Docket Number | Nos. 79-1269,s. 79-1269 |
| Parties | 6 Fed. R. Evid. Serv. 750 UNITED STATES of America, Appellee, v. Paul CIAMPAGLIA, Defendant, Appellant. UNITED STATES of America, Appellee, v. William WOODS, Defendant, Appellant. UNITED STATES of America, Appellee, v. Peter CANESSA, Defendant, Appellant. UNITED STATES of America, Appellee, v. John GINTNER, Defendant, Appellant. UNITED STATES of America, Appellee, v. Verner BANCROFT, Defendant, Appellant. UNITED STATES of America, Appellee, v. Stanley McNIFF, Defendant, Appellant, two cases. to 79-1272, 79-1274, 79-1391 and 80-1218. . Heard |
| Court | United States Courts of Appeals. United States Court of Appeals (1st Circuit) |
Michael F. Natola, Medford, Mass., with whom Alfred Paul Farese, Everett, Mass., was on brief, for defendant, appellant Paul Ciampaglia.
Bernard Grossberg, Boston, Mass., by appointment of the Court, on brief, for defendant, appellant William Woods, and William Woods, on supplementary brief pro se.
David D. Patterson, Boston, Mass., by appointment of the Court, for defendant, appellant Peter Canessa.
Paul A. Manoff, Cambridge, Mass., for defendant, appellant John Gintner.
Albert F. Cullen, Jr., Boston, Mass., by appointment of the Court, for defendant, appellant Verner Bancroft.
Richard K. Donahue, Lowell, Mass., with whom Donahue & Donahue, Lowell, Mass., Margot Botsford, S. Stephen Rosenfeld, and Rosenfeld, Botsford & Krokidas, Boston, Mass., were on brief, for defendant, appellant Stanley McNiff.
George F. Kelly, Asst. U.S. Atty., Springfield, Mass., with whom Edward F. Harrington, U.S. Atty., Boston, Mass., was on brief, for appellee.
Before COFFIN, Chief Judge, CAMPBELL and BOWNES, Circuit Judges.
In January of 1979, after a lengthy investigation, the grand jury returned indictments charging appellants and others with conspiracy to commit mail fraud, 18 U.S.C. § 371, (Count 1) and ten instances of mail fraud, 18 U.S.C. §§ 1341, 1342, (Counts 3-12). Each appellant with the exception of Paul Ciampaglia was also charged with conspiring to conceal the property of a bankrupt, 18 U.S.C. § 152, (Count 2). Appellants were tried together on all of these counts. At the close of the evidence, the trial court entered judgments of acquittal on seven of the mail fraud counts against John Gintner and Verner Bancroft who were not shown to have joined the conspiracy at the time that these seven acts of fraud were perpetrated. On all of the remaining counts, each of the appellants was convicted as charged. These appeals followed and have been consolidated for review. 1
In January of 1976 Peter Canessa rented space in a building on High Street in Clinton, Massachusetts, from Stanley McNiff. Beginning in late March and continuing through September, a large number of manufacturers, wholesalers and distributors began receiving orders for merchandise from a firm called Masterson Enterprises (Masterson), which listed the High Street building as its address. The orders were usually signed by Canessa. Most of the companies contacted responded by requesting credit information from references supplied by Masterson. At least some of the references were apparently fictitious, and one was a company operated by appellant Ciampaglia. Canessa and other defendants then arranged to send back false "responses" to the requests, providing fictitious favorable credit information concerning Masterson. Many of the companies with which the orders were placed then forwarded merchandise to Masterson. The merchandise, for which Masterson never paid, was initially stored in a number of Clinton locations owned by McNiff. Most of it was later sold, generally to a company operated by Ciampaglia, at prices substantially less than the wholesale cost.
In October of 1976 an involuntary petition for bankruptcy was filed against Masterson. The company was adjudicated bankrupt on October 11 and a receiver was appointed the next day. As a result of a fire at a building owned by McNiff and rented to Masterson, the receiver was notified by fire department officials of the existence in the building of several filing cabinets that contained legible Masterson records. Before the receiver could obtain the records, however, one of the defendants, Bancroft, removed the cabinets, and the records have never been found.
Appellants McNiff, Ciampaglia, Gintner, and Bancroft each contend that the evidence was insufficient to support their convictions. Viewing the evidence in the light most favorable to the government, United States v. Mora, 598 F.2d 682, 683 (1st Cir. 1979), we reject these contentions. Concerning Gintner, Bancroft, and Ciampaglia, the facts sufficient to support their convictions are set forth in Part VI of this opinion discussing the "willful blindness" instruction.
With regard to McNiff, the pertinent evidence was as follows: (1) He associated with Masterson and its chief operator, Canessa, continually from the commencement of Masterson's operations to the scheme's demise. (2) During this period, he provided for Masterson's use virtually all of the various buildings and trailers used by the conspirators. (3) As payment for providing these locations, he accepted merchandise, the receipt of which, despite the advice of his attorney, he did not record. (4) He claimed that he accepted the merchandise in lieu of normal rent because Masterson was short of cash, yet the evidence showed that he knew Masterson had a substantial amount of cash and generally operated on a "cash only" basis. (5) He failed promptly to disclose to the bankruptcy receiver the existence of a Masterson office trailer which he had received and placed behind a house near his premises. (6) When Masterson records were discovered at a house owned by him, he pretended not to know who owned the building and asked Leo Power "how the hell am I going to get around who rented the house and what was going on there ?" (emphasis added). (7) He suggested to Canessa that Masterson records, which were never found by the trustee, be moved from the building and he observed Bancroft removing them. (8) He provided a credit reference for Masterson at a local bank. (9) Attempting to conceal his connection to Masterson, he lied to a grand jury, and asked Power to lie also. (10) In a lengthy conversation with Power concerning the grand jury investigation, he indicated knowledge of the conspiracy and a desire to cover it up and to determine who was talking to the investigators. 2
Viewing all of this evidence together, we find it sufficient to have allowed the jury to find McNiff guilty beyond a reasonable doubt. In particular facts 3, 4, 6, 9 and 10, supra, were adequate to support a finding of knowledge of the conspiracies. Similarly facts 1, 2, 5 and 7 were adequate to support a finding that, knowing of the conspirators' objectives, McNiff actively assisted them in carrying out the two main conspiracies charged in the indictment. Finally, his knowledge of the aim of the conspiracy together with his own otherwise legitimate business experience supported a reasonable inference that he knew that the mails were to be used in defrauding the various creditors.
In United States v. Petrozziello, 548 F.2d 20 (1st Cir. 1977), we held that district courts should only admit out of court declarations of co-conspirators under Fed.R.Evid. 801(d)(2)(E) if "it is more likely than not that the declarant and the defendant were members of a conspiracy when the hearsay statement was made, and that the statement was in furtherance of the conspiracy." Id. at 23. During the trial of this case the prosecution's use of the out of court statements of various defendants as part of its case in chief against all defendants required the district court to apply the Petrozziello standard. On the eleventh day of trial, before the defense presented any evidence, the district court found that the prosecution had met the Petrozziello standard. The court thereupon removed the limitations that it had previously placed upon the use of the evidence.
Appellant McNiff now contends that because the district court made its ruling before the defense presented any evidence, it could not have properly applied the Petrozziello standard. Appellant reasons that Petrozziello requires a "preponderance of the evidence" test, United States v. Martorano, 557 F.2d 1, 11 (1st Cir. 1977), reh. denied 561 F.2d 406 (1st Cir. 1977), cert. denied, 435 U.S. 922, 98 S.Ct. 1484, 55 L.Ed.2d 515 (1978); that such a test requires a weighing of all the evidence; and that therefore it is impossible for the district court properly to have applied the test without hearing the defendants' evidence.
Neither in Petrozziello itself nor in subsequent cases, see, e. g., United States v. Martorano, supra; United States v. Pappas, 611 F.2d 399 (1st Cir. 1979), did we address the issue of when the required "more likely than not" findings are to be made. While it is not irrational to view Petrozziello as merely mandating an increase in the required probative force of the prosecution's evidence, cf. United States v. Trotter 529 F.2d 806, 812 (3rd Cir. 1976) (), we think that in adopting the "more likely than not", "preponderance" test we implicitly anticipated that the defendant's evidence would be taken into consideration. At least three circuit courts have explicitly adopted such a rule, see United States v. James, 590 F.2d 575, 582 (5th Cir.) (en banc), cert. denied 442 U.S. 917, 99 S.Ct. 2836, 61 L.Ed.2d 283 (1979); United States v. Bell, 573 F.2d 1040, 1043 (8th Cir. 1978); United States v. Stanchich, 550 F.2d 1294, 1298 (2d Cir. 1977), and we find much merit in it. It is not...
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