899 F.2d 211 (3rd Cir. 1990), 89-5372, United States v. Vastola
|Docket Nº:||UNITED STATES of America, Appellee at Nos. 89-5372/5383,|
|Citation:||899 F.2d 211|
|Case Date:||March 20, 1990|
|Court:||United States Courts of Appeals, Court of Appeals for the Third Circuit|
Argued Feb. 6, 1990.
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Herald Price Fahringer (argued), Diarmuid White, Michael Rosen, Joy Vastola, Lipsitz, Green, Fahringer, Roll, Schuller & James, New York City, for Gaetano Vastola.
Barry M. Fallick (argued), Rochman, Platzer, Fallick & Rosmarin, New York City, for Elias Saka.
Samuel A. Alito, Jr., U.S. Atty., Edna Ball Axelrod, Chief, Appeals Div., Marion Percell (argued), Asst. U.S. Atty., Newark, N.J., for U.S.
Before GREENBERG, SCIRICA, and SEITZ, Circuit Judges.
GREENBERG, Circuit Judge.
Table of Contents
---------- I. Introduction 214 II. The Facts 215 1. The Dwek Loan 216 2. The MCA Deal 217 III. Discussion A. Government's Appeal 1. Jurisdiction 219 2. Inconsistency of the Verdict on Count 1 222 B. Sufficiency of the Evidence on Count 2 226 C. The RICO Conspiracy 228 D. Sufficiency of the Evidence of MCA Extortion 229 E. Naming of the RICO Enterprise 230 F. Admissibility of Testimony Regarding Loansharking Terms 232 G. Reference to Federal Witness Protection Program 234 H. Appointment of New Counsel 236 I. The Electronic Surveillance 1. Background 237 2. Admissibility of Evidence from Electronic Surveillance 239 -------------------------------------------------------------------------- IV. Conclusion 242 I. INTRODUCTION
Gaetano Vastola and Elias Saka appeal to this court from final judgments of conviction and sentence entered by the United States District Court for the District of New Jersey on May 3, 1989, following a
jury trial in which they were found guilty of two substantive RICO offenses under 18 U.S.C. Sec. 1962(c), a RICO conspiracy offense under 18 U.S.C. Sec. 1962(d), and a conspiracy to use extortionate means to collect an extension of credit, in violation of 18 U.S.C. Sec. 894. In addition, Saka was found guilty of various other extortion offenses and of mail and wire bankruptcy and insurance fraud. The United States, pursuant to 18 U.S.C. Sec. 3731, appeals from an order of the district court, entered on April 28, 1989, granting Vastola's post-conviction motion for a judgment of acquittal on one of the two substantive RICO counts.
Appellants originally were indicted along with nineteen other defendants in a 114 count indictment charging a variety of crimes. By opinion and order dated September 1, 1987, the district court severed the case for separate trials. United States v. Vastola, 670 F.Supp. 1244, 1261 (D.N.J.1987). Vastola and Saka ultimately were tried on a twenty-six count redacted superseding indictment, filed on February 23, 1989, which named Saka in twenty-five counts and Vastola in fourteen. Both appellants were sentenced to total prison terms of twenty years and, in addition, Vastola was ordered to pay fines totalling $70,000 and Saka was ordered to pay fines totalling $185,000.
On appeal, Vastola contests the sufficiency of the evidence to support his convictions for the extortionate collection conspiracy charged in Counts 4 and 9 of the superseding indictment, and the substantive RICO offense charged in Count 2. He also asserts various grounds for reversal of his RICO conspiracy conviction under Count 3, including an alleged defect in the jury instructions and insufficiency of the evidence of his involvement in the predicate acts underlying the conspiracy. Finally, he raises various challenges to the conduct of the trial itself, arguing, in part, that he suffered irreparable prejudice because of the government's denomination of the criminal enterprise as the Vastola Organization, and because of the district court's admission of expert testimony regarding the meaning of loansharking terms used by appellants.
Saka argues that the district court erred as a matter of law when it denied his pretrial motion to suppress tape recordings from the government's electronic surveillance of appellants' communications, on the ground that the government violated the Wiretap Act, 18 U.S.C. Sec. 2510 et seq., when it relinquished custody of the tapes to a private party for enhancement. He also maintains that the district court abused its discretion when it denied his pretrial motion for appointment of new counsel and when it refused to suppress certain evidence seized pursuant to overbroad search warrants.
Finally, the government, in its appeal of the district court's grant of judgment of acquittal for Vastola on Count 1 of the superseding indictment, has advanced the legal question of whether the RICO conviction may stand, notwithstanding Vastola's acquittal of separately charged offenses making up three of the four predicate racketeering acts charged in the indictment.
We have considered the arguments raised by Vastola and Saka to the extent that they relate to both appeals, as Vastola and Saka have adopted each others' arguments pursuant to Fed.R.App.P. 28(i). Based on our review of the record, we agree with Vastola that there was insufficient evidence to support his RICO conviction under Count 2, and will reverse the district court's order entering judgment of conviction and sentence on that count. We also have determined that the district court erred as a matter of law in granting Vastola's motion for judgment of acquittal on Count 1, and therefore will reverse the order challenged in the government's appeal and remand Vastola's case for entry of judgment of conviction on Count 1 and for resentencing. In all other respects, under the applicable standards of review, we see no basis to disturb the district court's order with respect to Vastola, and will affirm his convictions on Counts 3, 4, and 9 of the superseding indictment. We will affirm Saka's convictions on all counts.
II. THE FACTS
The prosecution's theory, as reflected in its opening statement, was that Vastola
headed a "secret criminal enterprise," the "Vastola Organization," which "encouraged, aided and profited from" the illegal activities of its members. Ranking members of the enterprise were alleged to include Saka, "who came up with most of the fraudulent schemes the organization profited from," and Vastola's cousin, Palmer ("Sonny") Brocco, who carried out Vastola's orders. The enterprise was headquartered at the Video Warehouse in Monmouth County, New Jersey.
The indictment attributed various crimes to the enterprise, including a conspiracy to use and use of extortionate means to collect an extension of credit to John LaMonte in connection with a record purchase from MCA Records, Inc., numerous usurious loans, "bust-out" schemes to defraud suppliers to businesses controlled by the enterprise, and insurance and bankruptcy frauds. We will set forth the circumstances of only the two of these crimes necessary to our discussion.
1. The Dwek Loan
Joseph Dwek was an executive at Chams Clothing Company. He testified that when he left the company, he negotiated a financial settlement which ultimately yielded him $40,000 in return for his relinquishment of certain contract rights. When that money was not immediately forthcoming, he began to experience "financial difficulty." A friend of his, Ralph Setton, put him in contact with Saka.
Saka and Dwek met in February, 1985 to discuss Dwek's prospects for obtaining a loan. Saka told Dwek that he could deliver $10,000 in cash within a day which would be payable at an interest rate of $250 per week. They consummated the deal in a subsequent meeting, at which Sonny Brocco gave Dwek $10,000 in cash. The debt was evidenced by a promissory note which did not contain any interest rate terms.
Dwek testified that he regularly paid the interest on his loan at the Video Warehouse and would give the money to whoever was present, normally, Saka, Sonny Brocco or Nick Massaro. However, he understood Saka to be the obligee. When Dwek's settlement from Chams Clothing was further delayed, he borrowed an additional $5,000 from Saka at an interest rate of $125 per week. Dwek further testified that he saw Vastola at the Video Warehouse about two or three times over a six month period and knew him to be Saka's landlord.
Around this time, Dwek also entered a partnership with Saka to market a perfume developed by a clothing company called Jou Jou. They agreed to become equal partners, with Saka supplying the financing and Dwek, the business expertise. Although Saka and Dwek did not go far in this venture because the "monetary funds" were unavailable, they did form a small corporation for the purpose of effectuating the Jou Jou deal and Saka attempted to flesh out the details of how the profits would be allocated. 1
In any event, Dwek soon fell behind on his interest payments. In a telephone conversation on May 7, 1985, Brocco did not mince words on the subject of Dwek's lateness:
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