Carbo v. United States

• Citation: 314 F.2d 718
• Decision Date: 19 March 1963
• Docket Number: No. 17762.,17762.
• Parties: Paul John CARBO, Frank Palermo, Joseph Sica, Louis Tom Dragna, and Truman K. Gibson, Jr., Appellants, v. UNITED STATES of America, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

314 F.2d 718 (1963)

Paul John CARBO, Frank Palermo, Joseph Sica, Louis Tom Dragna, and Truman K. Gibson, Jr., Appellants, v. UNITED STATES of America, Appellee.

No. 17762.

United States Court of Appeals Ninth Circuit.

February 13, 1963.

Rehearing Denied March 19, 1963.

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William B. Beirne and A. L. Wirin, Los Angeles, Cal., for appellant Carbo.

Jacob Kossman, Philadelphia, Pa. and Morris Lavine, Los Angeles, Cal., for appellant Palermo.

Russell E. Parsons, Edward I. Gritz, Iener W. Nielsen, Fresno, Cal., of counsel, for appellant Sica.

Fred Okrand, Los Angeles, Cal., for appellant Dragna.

Loren Miller, Los Angeles, Cal., William R. Ming, Jr., Chicago, Ill., for appellant Gibson.

Francis C. Whelan, U. S. Atty., Robert E. Hinerfeld, Asst. U. S. Atty., Alvin H. Goldstein, Jr., Special Asst. to the Atty. Gen., Los Angeles, Cal., for appellee.

Before BARNES, HAMLIN and MERRILL, Circuit Judges.

MERRILL, Circuit Judge.

Appellants stand convicted of extortion affecting commerce and conspiracy to extort in violation of 18 U.S.C. § 1951, commonly known as the Hobbs Act,¹ of the interstate transmission of threats and conspiracy to transmit in violation of 18 U.S.C. § 875(b),² and of conspiracy to commit an offense against the United States under 18 U.S.C. § 371.³ They were variously charged in ten counts of an indictment by the Grand Jury of the Southern District of California, Central Division. On May 30, 1961, following trial, they were found guilty by jury verdict and on December 2, 1961, were duly sentenced. They have appealed from their several judgments of conviction.

The case involves in general the business of professional boxing and fight promotion and, more specifically, the efforts of appellants to secure managerial control of Don Jordan, a welterweight fighter, by bringing pressure to bear on his manager, Donald Nesseth. These efforts were prompted, according to the theory of the United States as expressed in its brief, by the fact that "* * * `control' of champions and top contenders was the only significant profit factor in the operation of the boxing business. The evidence shows that `control' was effected and maintained through matching controlled fighters with one another and that the technique for obtaining this control was to capture the fight manager through use of economic and, as a last resort, physical coercion."

Since the contentions on appeal relate importantly to the sufficiency of the evidence, the facts must be dealt with at some length.

THE FACTUAL BACKGROUND

The matching of controlled fighters has already been considered by the federal courts in proceedings brought against the International Boxing Clubs of New York and Illinois for violation of the Sherman Act. International Boxing Clubs of N. Y. v. United States, 1959, 358 U.S. 242, 79 S.Ct. 245, 3 L.Ed.2d 270, affirming United States v. International Boxing Clubs of N. Y., S.D.N.Y., 1957, 150 F.Supp. 397. Since these proceedings figure directly in the background of the case at bar, a reference to the facts there established is helpful. The Supreme Court, 358 U.S. at pages 245-246, 79 S.Ct. at pages 247-248, 3 L.Ed.2d 270 recites:

"The conspiracy began in January 1949, when appellants Norris and Wirtz, who owned and controlled the Chicago Stadium, the Detroit Olympia Arena and the St. Louis Arena, made an agreement with Joe Louis, the then heavyweight boxing champion of the world. Wishing to retire, Louis agreed to give up his title after obtaining from each of the four leading contenders exclusive promotion rights including rights to radio, television and movie revenues. Upon securing these exclusive contracts Louis assigned them to the appellant International Boxing Club, Illinois * * *."

The opinion then recites that Norris and Wirtz organized the International Boxing Club of New York and for it acquired control of Madison Square Garden and entered into other contracts. The opinion then states, 358 U.S. at pages 247-248, 79 S.Ct. at pages 248-249, 3 L.Ed.2d 270:

"This series of agreements, consummated within four months\' time, gave appellants exclusive control of the promotion of boxing matches in three championship divisions, i. e., heavyweight, middleweight, and welterweight. Not satisfied with this temporary control, however, appellants perpetuated their hold on championship bouts by requiring each contender for the title to grant to them an exclusive promotion contract to his championship fights, including film and broadcasting, for a period of from three to five years. Over the facilities for the staging of contests appellants exercised like control, owning or managing the `key\' arenas and stadia in the Nation.

* * * * * *

"The effect of the conspiracy is obvious. Using the facilities of I. B.C., Illinois, and I.B.C., New York, appellants entered into exclusive promotion contracts with title aspirants, requiring exclusive handling agreements in the event the contender became champion. In amassing their empire, appellants obtained control of champions in three divisions. The choice given a contender thereafter was clear, i. e., to sign with appellants or not to fight."

Later, 358 U.S. at page 254, 79 S.Ct. at page 252, 3 L.Ed.2d 270, the opinion states:

"This illegal activity gave appellants an odorous monopoly background which was known and still feared in the boxing world."

By the decree Norris and Wirtz were directed to divest themselves of their stock holdings in Madison Square Garden. The boxing clubs were ordered dissolved. All exclusive agreements for the promotion of boxing events were banned.

Appellant Truman Gibson, a Chicago attorney, represented Joe Louis in 1949 at the outset of the sequence of events described in the Supreme Court opinion and from their inception was active in the affairs of the International Boxing Clubs. In 1958 he was made president of both clubs. It is the government's position that as antitrust pressure was applied to the clubs they ceased their practice of requiring that exclusive management be granted to the clubs; that the practice of securing exclusive management agreements was continued by Appellants Carbo and Palermo and that Appellant Gibson, with full knowledge of Carbo's practices and methods of operation, continued, through his dealings with Carbo and for their mutual advantage to match Carbo-controlled fighters.

Carbo, with a background of underworld association, emerges as the leader of the conspirators. Gibson's first contact with him came shortly after the boxing clubs were organized sometime in 1950. From time to time between 1954 and 1957, Gibson caused payments amounting to approximately $40,000.00 to be made to Carbo by the boxing clubs through the device of placing Carbo's wife, Viola Masters, on the clubs' payrolls for fictitious employment. Payment was explained by Gibson as being for the purpose of securing Carbo's good will and of preventing fighters or managers with whom Carbo had "influence" from becoming antagonized or alienated. In investigations conducted by the United States Senate, Gibson had explained why Carbo's wife had been employed rather than Carbo himself: "Because it looked a little bit better on our records, not ever considering the possibility of being called before a senate investigative committee, to have Viola Masters down instead of Frank Carbo." Both before the Senate committee and in trial below, Gibson acknowledged that in their operations the boxing clubs had had dealings with the underworld. This practice was resorted to in order "to maintain a free flow of fighters without interference, without strikes, without sudden illnesses, without sudden postponements." Gibson testified that the boxing clubs would use "everyone" they could to prevent fixed fights and that in "everyone" he included the underworld. On redirect examination Gibson was asked whether it was "the policy of the International Boxing Club or any other organization with which you were connected in the fight business to use force or violence or threats of force and violence * * *" to which Gibson replied "No indeed." On re-cross-examination he was asked: "Of course, Mr. Gibson, when you used various people to achieve your ends you didn't know what those other people were doing on your behalf, did you?" To which Gibson answered: "Not completely, no."

The district court judgment in the antitrust action was rendered in March, 1957. Commencing in the summer of 1958 Gibson sought to extend the influence of the boxing clubs to the west coast. At that time there were two exhibition halls in Los Angeles suitable for the staging of boxing contests: the Hollywood Legion Stadium and the Olympic Auditorium. Gibson moved to secure control of both.

At this time he was in charge of promoting weekly the two nationally televised boxing contests: Wednesday night on ABC and Friday night on NBC. At least $180,000.00 a week was received by the boxing clubs in connection with these promotions. The possibility of sharing in the television profits provided an incentive to deal with Gibson. A new organization known as the "Hollywood Boxing and Wrestling Club" was established by Gibson and his associates to lease the Hollywood Legion Stadium. The International Boxing Clubs lent $28,000.00 to this organization to commence operation. Named as president of the new organization and acting as its promoter and matchmaker was Leonard Blakely, known professionally (and hereinafter referred to) as "Jackie Leonard." Leonard's vulnerability to economic pressure from Gibson is apparent. Not only was his club indebted to Gibson's organizations but his future was largely dependent on Gibson's good will with respect to participation in the televising of contests.

In the fall of 1951, Virgil Akins, a Carbo-controlled fighter, was welterweight champion. A promising contender was Don Jordan, who...