648 F.2d 367 (5th Cir. 1981), 78-3611, United States v. Martino

Docket Nº:78-3611, 78-5260 and 79-2606.
Citation:648 F.2d 367
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. Sam C. MARTINO, Joseph C. Russello and Rolando Gonzalez Rodriguez, Defendants- Appellants. UNITED STATES of America, Plaintiff-Appellee, v. John Alan HOLT, Rosario Palermo, William H. Brown, a/k/a Bill, John D. Fisher, Robert D. Young, Joseph Macaluso, a/k/a Joe, Frank Scionti, John Nicholas Lostracc
Case Date:June 19, 1981
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 367

648 F.2d 367 (5th Cir. 1981)

UNITED STATES of America, Plaintiff-Appellee,


Sam C. MARTINO, Joseph C. Russello and Rolando Gonzalez

Rodriguez, Defendants- Appellants.

UNITED STATES of America, Plaintiff-Appellee,


John Alan HOLT, Rosario Palermo, William H. Brown, a/k/a

Bill, John D. Fisher, Robert D. Young, Joseph Macaluso,

a/k/a Joe, Frank Scionti, John Nicholas Lostracco, Sam C.

Martino, Paul Guarino, Jimmy Farina, Berton B. Chase, a/k/a

Bert, Rolando Gonzalez Rodriguez, a/k/a Roland Rodriguez,

Joseph D. Lazzara, a/k/a Joe, Joseph C. Russello, a/k/a Joe

and Amalia Morgado, Defendants- Appellants.

UNITED STATES of America, Plaintiff-Appellee,


Sam C. MARTINO, Defendant-Appellant.

Nos. 78-3611, 78-5260 and 79-2606.

United States Court of Appeals, Fifth Circuit

June 19, 1981

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D. Frank Winkles, Tampa, Fla., for Martino and Lostracco.

Raymond E. LaPorte, Tampa, Fla., for Russello.

Peter N. Macaluso, Tampa, Fla., for Rodriguez.

Gary L. Betz, U.S. Atty., Jacksonville, Fla., Eleanor J. Hill, Sp. Atty., Dept. of Justice, Tampa, Fla., Sara Criscitelli, Dept. of Justice, Washington, D.C., for U.S.

Roland A. Rosello (Court-appointed), Tampa, Fla., for Holt.

C. Steven Yerrid (Court-appointed), Tampa, Fla., for Palermo.

Arthur W. Fisher, III (Court-appointed), Tampa, Fla., for Fisher.

Guy E. Labalme (Court-appointed), Tampa, Fla., for Young.

Daniel J. Newman (Court-appointed), Tampa, Fla., for Macaluso.

Sam D. Pendino (Court-appointed), Tampa, Fla., for Scionti.

Gary R. Trombley, Claude H. Tison, Jr., Tampa, Fla., for Martino.

William T. Fussell, Tampa, Fla., for Guarino.

William B. Plowman, Tampa, Fla., for Farina.

Mark J. Kadish, Edward T. M. Garland, Atlanta, Ga., for Chase.

Barry A. Cohen, Richard Pippinger, Tampa, Fla., for Lazzara.

Michael Addison (Court-appointed), Tampa, Fla., for Morgado.

Appeals from the United States District Court for the Middle District of Florida.

Before TUTTLE, VANCE and POLITZ, Circuit Judges.

POLITZ, Circuit Judge:

In the decade following enactment of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961 et seq., prosecutions under that Act have begun to follow the recognizable patterns we noted in United States v. Malatesta, 583 F.2d 748 (5th Cir. 1978), aff'd on reh. on other grounds, 590 F.2d 1379 (5th Cir.) (en banc), cert. denied, 440 U.S. 962, 99 S.Ct. 1508, 59 L.Ed.2d 777 (1979). The cases are characterized by lengthy indictments involving multiple defendants charged with diverse criminal activity. In the style of that embryonic tradition this appeal presents sixteen defendants with a combined total of eighty convictions.

The prosecutions we review were commenced by an eighty-three page, thirty-five count indictment, charging twenty-three defendants with mail fraud, RICO conspiracy and RICO substantive violations, specifying sixty-nine overt acts and fifty-six predicate acts of racketeering activity. Three defendants entered guilty pleas. The remaining twenty were jointly tried before a jury in a trial spanning three months. After deliberating three and one-half weeks, the jury found four defendants not guilty and sixteen defendants guilty of one

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or more counts; all appeal. 1 The supplemented record on appeal includes 8 volumes of pleadings, nearly 100 volumes containing more than 11,000 pages of the testimony of over 200 witnesses, and 5 boxes of exhibits.

The indictment resulted from an investigation of a large number of suspected acts of arson occurring in Tampa and Miami, Florida between July 1973 and April 1976. The indictment charges that a group composed of an insurance adjuster, homeowners, promoters, investors and arsonists associated for the purpose of committing arson with the intent to defraud fire insurers. This association of individuals is characterized as an "enterprise," thus bringing the offenses within the purview of RICO, 18 U.S.C. § 1962. 2 Count 1, of which the sixteen defendants were convicted, charges a conspiracy to violate RICO, § 1962(d). Count 2, of which fifteen defendants were convicted, charges a substantive violation of RICO, § 1962(c). Counts 3 through 35 charge various defendants with violations of the mail fraud statute, 18 U.S.C. § 1341, 3 and aiding and abetting, 18 U.S.C. § 2, 4 arising out of the filing of insurance claims and receipt of payments for the losses resulting from the arsons.

Several issues are presented on appeal; some are common to all appellants, some to more than one, and some apply to only a particular appellant. Each appellant has filed a brief in which the arguments advanced by all other appellants are adopted. We shall, in general, address the common issues first and then review those issues pertinent to only a single appellant.

I. The Setting The Cast

A summarization of the facts concerning each of the fifteen fires and subsequent insurance claims is set forth in the Appendix. We discuss these facts in somewhat greater detail during consideration of various contentions of insufficient evidence to

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support the convictions. An overview of the charged conspiracy and enterprise, however, facilitates an understanding of the application of RICO, particularly because the degree of involvement varied with each defendant.

The arson ring began operating in 1973 when Paul Guarino and Frank Scionti hired Willie Noriega as their principal "torch." At first the arsonists only burned buildings already owned by those associated with the ring. Following a burning, the building owner filed an inflated proof of loss statement and collected the insurance proceeds from which his co-conspirators were paid. Later, ring members bought buildings suitable for burning, secured insurance in excess of value and, after a burning, made claims for the loss and divided the proceeds.

Different roles were played by those defendants comprising the enterprise. Joseph J. Carter was the insurance adjuster who, with knowledge of the arson, processed fire loss claims. In return for this service and for guiding others to insurance agencies where fire insurance could be secured in excess of the value of substandard property, Carter received a portion of the insurance proceeds. He pled guilty to nineteen counts and testified as a government witness.

Willie Noriega, the primary arsonist, pled guilty to all 35 counts and testified as the key government witness. Noriega was assisted in the "torching" by Paul Guarino, Frank Scionti, Joseph Macaluso and Victor Arrigo, who also testified as a government witness after pleading guilty to seven counts.

Sam C. Martino and Berton B. Chase provided financing for some of those who bought property targeted to be burned. Martino was in the real estate business and, in addition to arranging loans, located substandard property for use in the scheme. The defendants who acquired or aided in the acquisition of targeted property, secured excessive insurance and collected insurance payments included Carter, Guarino, Martino, Noriega, Macaluso, Amalia Morgado, John D. Fisher and Robert D. Young.

Several defendants already owned premises, mostly substandard, covered by fire insurance. They needed only the services of the arsonists and, in some instances, claims assistance. This group included Jimmy Farina, Joseph D. Lazzara, Rolando Gonzalez Rodriguez, Joseph C. Russello, John Alan Holt, Rosario Palermo and William H. Brown.

Finally, there were those who served as the contacts or go-betweens for persons who owned property they wished to have burned, or who wanted to acquire property for that purpose, and the arsonists. These "marketers" or "brokers" included Carter, Guarino, Scionti, Morgado, Martino and John Nicholas Lostracco.

With the basic structure of the "enterprise" and the roles of the various defendants in perspective, we now consider the assignments of error.

A. Constitutionality of RICO

The RICO statute is challenged on five grounds that, in the main, have been considered and dismissed in earlier cases. It is contended that RICO (1) punishes associational status, (2) does not apply to enterprises engaged solely in criminal activity, (3) is unconstitutionally vague, (4) operates ex post facto, and (5) is contrary to the Ninth and Tenth Amendments.

In United States v. Elliott, 571 F.2d 880 (5th Cir.), cert. denied, 439 U.S. 953, 99 S.Ct. 349, 58 L.Ed.2d 344 (1978), we rejected the argument that RICO unconstitutionally punishes associational status; "its proscriptions are directed against conduct, not status." Id. at 903. Also in Elliott, and recently reaffirmed in United States v. Diecidue, 603 F.2d 535 (5th Cir. 1979), cert. denied, 445 U.S. 946, 446 U.S. 912, 100 S.Ct. 1345, 100 S.Ct. 1842, 63 L.Ed.2d 781, 64 L.Ed.2d 266 (1980), we held RICO applicable to a group whose sole purpose was to engage in illegal activities. Appellants request a reconsideration of that position in light of contrary opinions from other circuits. 5 We are aware of the criticisms leveled

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at our decisions and we recognize that appellants' position is arguably meritorious. What appellants request, however, is not a course available to this panel but is a prerogative only of our court sitting en banc.

Appellants' third contention, that RICO is unconstitutionally vague, was rejected in United States v. Hawes, 529 F.2d 472, 479 (5th Cir. 1976), in which we held that a person of average intelligence, upon reading the...

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