854 F.2d 535 (2nd Cir. 1988), 107, United States v. Friedman

Docket Nº:107 to 110, Dockets 87-1134, 87-1137 to 87-1139.
Citation:854 F.2d 535
Party Name:UNITED STATES of America, Appellee, v. Stanley FRIEDMAN, Michael Lazar, Lester Shafran, and Marvin Kaplan, Defendants- Appellants.
Case Date:June 14, 1988
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

Page 535

854 F.2d 535 (2nd Cir. 1988)

UNITED STATES of America, Appellee,


Stanley FRIEDMAN, Michael Lazar, Lester Shafran, and Marvin

Kaplan, Defendants- Appellants.

Nos. 107 to 110, Dockets 87-1134, 87-1137 to 87-1139.

United States Court of Appeals, Second Circuit

June 14, 1988

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Argued Sept. 17, 1987.

As Amended July 18, 1988.

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Alan M. Dershowitz, Cambridge, Mass. (Nathan Z. Dershowitz, Victoria B. Eiger, Dershowitz & Eiger, New York City, of counsel), for defendant-appellant Stanley Friedman.

Marvin E. Frankel, New York City (Debora K. Grobman, Jonathan L. Polkes, Lisa E. Davis, Kramer, Levin, Nessen, Kamin & Frankel, New York City, of counsel), for defendant-appellant Michael Lazar.

Larry J. Silverman, New York City (Shira A. Scheindlin, Cynthia R. Finn, Scott Francis, Budd Larner Gross Picillo Rosenbaum Greenberg & Sade, New York City, of counsel), for defendant-appellant Lester Shafran.

Gerald B. Lefcourt, New York City (Walter P. Loughlin, Newark, New Jersey, Joshua L. Dratel, Erica Horwitz, New York City, of counsel), for defendant-appellant Marvin Kaplan.

Stuart E. Abrams, Asst. U.S. Atty. for S.D.N.Y., New York City (Rudolph W. Giuliani, U.S. Atty. for S.D.N.Y., William J. Schwartz, Bruce A. Green, Asst. U.S. Attys. for S.D.N.Y., New York City, of counsel), for appellee.

Arthur Eisenberg, New York City, for amicus curiae New York Civil Liberties Union.

Before CARDAMONE, WINTER and PRATT, Circuit Judges.

WINTER, Circuit Judge:

The New York City Parking Violations Bureau ("PVB"), an agency of the City's Department of Transportation ("DOT"), collects parking fines. But the jury in this

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case found that the PVB was also used to collect bribes and kickbacks and had become a cesspool of corruption. It found that appellants Stanley Friedman, Michael Lazar, Lester Shafran and Marvin Kaplan had participated in the operation of the PVB as a racketeering enterprise, in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. Secs. 1961, 1962(c), (d) (1982 & Supp. IV 1986). The jury convicted each appellant of racketeering, conspiracy to engage in racketeering, and mail fraud. In addition, Kaplan was convicted of having perjured himself in testimony before the Securities and Exchange Commission about bribes relating to this case.

Appellants raise a host of issues. Shafran and Kaplan contend that the government's evidence was insufficient to prove certain of the charges against them. Lazar contends that the evidence demonstrated multiple conspiracies rather than the single conspiracy charged in the indictment. Lazar and Shafran contend that the district court erred in denying their requests for severance. Kaplan contends that his convictions should be reversed because some of the testimony against him was "purchased" by a grant of immunity amounting to "an invitation to perjury"; that his RICO conviction should be reversed because his alleged bribery of two public officials constituted a single criminal transaction under New York law and therefore was only one predicate act under RICO; and that even if he was properly found to have committed two predicate acts, these acts did not constitute a "pattern of racketeering activity." Friedman contends that his attorney's alleged conflicts of interest denied him the effective assistance of counsel; that he was prejudiced by erroneous evidentiary rulings; and that he was further prejudiced by the district court's publicly-reported belief that he had told a "highly improbable story" on the witness stand. Finally, all appellants contend that the indictment should have been dismissed because the government repeatedly violated Fed.R.Crim.P. 6(e) by generating extensive publicity through leaking information concerning the grand jury proceedings.

We vacate the mail fraud convictions in light of the government's concession that McNally v. United States, --- U.S. ----, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987), requires us to do so. In addition, we reserve decision on Kaplan's RICO convictions pending in banc review of issues in an unrelated case concerning the meaning of a "pattern of racketeering activity." The remaining convictions, however, are affirmed. Given the length of the trial, the complexity of the issues, and the vigor with which it was prosecuted and defended, Judge Knapp conducted a remarkably fair and error-free trial.


A. The Indictment and the Proceedings Below

Appellants were tried on a fourth superseding indictment, Indictment SSSS 86 Cr. 259 (WK), filed in the Southern District of New York on September 10, 1986. The indictment contained ten counts. Count One charged that appellants, along with unindicted "co-racketeers" Donald Manes and Geoffrey Lindenauer, and defendant Marvin Bergman (who was severed at the close of the government's case), had conducted and participated in the affairs of an enterprise--the PVB--through a pattern of racketeering activity in violation of 18 U.S.C. Sec. 1962(c). Count Two charged the same individuals with having conspired to conduct and participate in the affairs of the PVB through a pattern of racketeering activity, in violation of 18 U.S.C. Sec. 1962(d). In support of Counts One and Two, the indictment alleged that the general object of the racketeering activity was "to transform the PVB from a public agency devoted to the performance of public services ... into a vehicle for the corrupt profit of county leaders, public officials, private businesses and private businessmen."

The RICO counts charged appellants with twenty-two predicate acts of racketeering. Friedman was charged in four racketeering acts (Nos. Nine, Ten, Twenty-One and Twenty-Two) with having bribed Manes and Lindenauer on behalf of two

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PVB contractors, Citisource and Datacom, and in one racketeering act (No. Twenty) with having committed mail fraud in violation of 18 U.S.C. Sec. 1341 (1982) by facilitating a bribery scheme on behalf of another contractor, the Bernard Joint Venture. Lazar was charged in three racketeering acts (Nos. One, Two and Three) with having bribed Manes and Lindenauer on behalf of two PVB contractors, Datacom and Miller & Rothman, and in one racketeering act (No. Four) with bribing Shafran by providing him with the opportunity to invest in a parcel of commercial real estate, the Candler Building, on behalf of a PVB contractor, Datacom. Three other racketeering acts (Nos. Six, Seven and Eight), which charged Lazar with having committed bribery to increase the value of the Candler Building, were dismissed before trial. Shafran was charged in ten racketeering acts (No. Five, and Nos. Eleven through Nineteen) with having accepted, in violation of New York law, the alleged real-estate bribe from Lazar and a series of other bribes from two PVB contractors, Systematic Recovery Services and the Bernard Joint Venture. Finally, Kaplan was charged in two racketeering acts (Nos. Nine and Ten) with having bribed Manes and Lindenauer on behalf of one of his own firms, Citisource.

Count Seven charged Kaplan with perjury in his testimony before the SEC, in violation of 18 U.S.C. Sec. 1621 (1982). The remainder of the indictment was devoted to bribery-related charges of mail fraud involving various permutations of defendants and contractors and essentially tracking the predicate acts detailed above.

At the request of the defendants, Judge Knapp conducted the trial in New Haven, Connecticut with jurors from the Hartford area. See Fed.R.Crim.P. 21. The trial lasted just over nine weeks. The jury convicted Friedman, Lazar, Shafran and Kaplan on Counts One and Two, the racketeering and racketeering conspiracy charges. Friedman and Kaplan were found guilty of all of the racketeering acts with which they were charged. Lazar was found guilty of the three racketeering acts (Nos. One, Two and Three) that charged him with having bribed Lindenauer; he was found not guilty, however, of the racketeering act (No. Four) involving his alleged bribery of Shafran by means of an investment in the Candler Building. The jury found Shafran guilty of six (Nos. Twelve and Fourteen, and Nos. Sixteen through Nineteen) of the ten racketeering acts with which he was charged; he was found not guilty of having taken the alleged Candler Building bribe from Lazar (No. Five) and of three (Nos. Eleven, Thirteen and Fifteen) of the eight racketeering acts that charged him with accepting bribes from Systematic Recovery Services. In addition, the jury disposed of the mail fraud counts in a fashion consistent with its findings as to the RICO predicate acts, returning verdicts of guilty on each count save for Count Five, which charged both Lazar and Shafran with mail fraud in connection with the alleged Candler Building bribe. Finally, the jury convicted Kaplan of perjury.

Friedman received a twelve-year sentence of imprisonment, to be followed by five years' probation, and was required under 18 U.S.C. Sec. 1963 (1982) to forfeit 167,500 shares of stock in Citisource, a firm that the jury found had enlisted Friedman to pay bribes. Lazar received three years' imprisonment and a fine of $200,000, and was required to forfeit $45,000. Kaplan received four years' imprisonment and a fine of $250,000, and, like Friedman, was required to forfeit his 90,000 shares of Citisource. And Shafran, whom the district court considered "the least culpable" of the defendants, was sentenced to six months' imprisonment to be followed by five years' probation. Finally, each defendant was required to pay a special assessment as required by 18 U.S.C. Sec. 3013 (Supp. IV 1986).

B. The Government's Proof

In light of the jury's verdict, we view the evidence in the light most favorable to the government.

1. The...

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