Matter of Extradition of Pazienza, 85 Cr.Misc. # 1

• Decision Date: 25 September 1985
• Docket Number: p. 7.,No. 85 Cr.Misc. # 1,85 Cr.Misc. # 1
• Citation: 619 F. Supp. 611
• Parties: In the Matter of the EXTRADITION OF Francesco PAZIENZA.
• Court: U.S. District Court — Southern District of New York

619 F. Supp. 611

In the Matter of the EXTRADITION OF Francesco PAZIENZA.

No. 85 Cr.Misc. # 1, p. 7.

United States District Court, S.D. New York.

September 25, 1985.

David Denton, Asst. U.S. Atty., New York City, for plaintiff.

Stuart Baskin, Kramer, Levin, Nessen, Kamin & Frankel, New York City, for defendant.

CORRECTED MEMORANDUM AND ORDER

BRIEANT, District Judge.

The United States of America, representing the Republic of Italy, has requested the extradition of Dr. Francesco Pazienza pursuant to the 1983 Extradition Treaty between the United States and Italy (entered into force September 24, 1984) ("the Treaty"), ___ U.S.T. ___ and 18 U.S.C. § 3184. Italy seeks Dr. Pazienza's extradition on the basis of a warrant issued by a Milan court, charging him with conspiracy, and aiding and abetting the crime of "fraudulent bankruptcy." For the reasons that follow, this Court finds and concludes that the Government's evidence is sufficient to sustain the charges under the provisions of the Treaty, that no defense raised by Pazienza bars extradition, and that the requested person shall be certified to the United States Secretary of State for surrender to the government of Italy.

On March 4, 1985, while voluntarily attending the second of two scheduled meetings with United States Customs agents in New York City, Dr. Pazienza was detained and informed that a warrant for his arrest had been authorized by the Department of Justice. Apparently with the consent of his then counsel, Dr. Pazienza was detained briefly without the benefit of a formally issued arrest warrant in this district. (Transcript of June 14, 1985, p. 114). On March 5, 1985, the Assistant United States Attorney in charge of this case, Mr. David Denton, swore to a Complaint for Provisional Arrest, averring that an arrest warrant for Dr. Pazienza had been issued in Italy on April 18, 1983 by the Investigating Judge of the Criminal Court of Milan.

The United States also moved for the detention of Dr. Pazienza without bail, which motion was opposed by Dr. Pazienza and his attorneys. At the conclusion of a full adversarial hearing, this Court found that the Conditions for provisional arrest set forth in Article XII of the Treaty had been satisfied, and that Dr. Pazienza should not be released on bail. See Transcript dated March 7, 1985, Decision of the Court, pp. 104-120. The proof at that hearing showed that he had been a lammister of long standing, now holding a Seychelles passport and citizenship.

Within the appropriate period of time, the Italian government provided formal documentation to support its request (Declaration of Laura Pollard, Esq., United States Department of State, and Attachments, dated April 19, 1985), and Mr. Denton filed a formal complaint for extradition. Thereafter on June 14 and July 15, 1985, this Court conducted an evidentiary hearing pursuant to § 3184.

The Republic of Italy seeks Pazienza's return in order that he stand trial on two counts of fraudulent bankruptcy. This crime in essence is the offense of knowing and wilfull misappropriation of the assets of a company later adjudicated bankrupt. According to the April 18, 1983 Milan warrant, Count "A" charges that Pazienza, together with Mazzotta, Annibaldi, Carboni, Cassella and Pellicani collaborated to misapply or embezzle Six Billion Lire loaned by Banco Ambrosiano to an Italian company named Prato Verde. Roberto Calvi, the former president of Banco Ambrosiano, is also named in Count "A". However, Mr. Calvi could not be charged with any offense because of his intervening death. Mr. Calvi was, in fact, found hanged under the Blackfriars Bridge in London, a manner of death fraught with symbolism.

Count "B" of the April 18, 1983 warrant charges that the same defendants conspired to defraud Banco Ambrosiano of the Six Billion Lire loaned to Prato Verde, with the deliberate intention of defaulting on the loan, and of using the funds for personal purposes and for the benefit of third parties. Essentially Count "A" is framed as a crime against Prato Verde, while Count "B" charges an offense causing detriment to Banco Ambrosiano.

On February 25, 1985 the Milan court issued a superseding warrant to reflect the fact that Prato Verde had been adjudicated bankrupt in 1984. Under Italian law, it is mandatory to prosecute under the Bankruptcy Act once the allegedly defrauded company is found to be insolvent. Therefore, the former Count "A" which had charged misappropriation of assets belonging to Prato Verde (Italian Penal Code §§ 646, 110) merged into and was amended to become an offense under the Italian Bankruptcy Act of 1942, §§ 216, 219, 223. Count "B", relating to the bankrupt Banco Ambrosiano, had always been charged under the Bankruptcy Act, and remains unchanged by the superseding warrant of February 25, 1985.

According to the explanation provided by the Milan court, although Pazienza is now charged with fraudulent bankruptcy in both counts of the new warrant, "the elements of the offense against the company Prato Verde and the proof relating to the offense remain the same as they did with respect to the former charge of misapplication embezzlement (Articles 110 and 646 of the Penal Code)."

The provisions of the Bankruptcy Act under which Pazienza is charged state:

"Art. 216 (Fraudulent Bankruptcy)

Any entrepreneur adjudged bankrupt shall be subject to a term of imprisonment of 3 to 10 years when:

1. He diverted, concealed, disguised, destroyed or wasted, in whole or in part, his own properties, or, for the purpose of causing his creditors to suffer a damage, he stated or acknowledged non-existent liabilities;

2. He stole, destroyed or falsified, in whole or in part, for the purpose of deriving an unjust profit for himself or others or for the purpose of causing his creditors to suffer a damage, the books or other book-keeping entries or kept them in such a manner as to render it impossible to reconstruct his estate or business.

* * * * * *

Art. 219 — Aggravating and extenuating circumstances.

When the facts mentioned in Articles 216, 217 and 218 caused heavy financial damage, the punishments mentioned therein shall be increased by up to one half.

The punishments mentioned in the said articles shall be increased:

1. If the guilty person committed more than one of the facts mentioned in each of the said articles;

2. If the guilty person was not permitted by law to carry on business.

* * * * * *

Art. 223 — Facts of fraudulent bankruptcy.

The Directors, General Managers, Auditors and Liquidators of a firm adjudged bankrupt, who committed any of the facts mentioned in Art. 216, shall be subject to the punishments provided for in said article.

The aforementioned persons shall be liable to the punishment in the first paragraph of Art. 216, when:

1. They committed any of the facts mentioned in Articles 2621, 2622, 2623, 2628 and 2630, first paragraph, of the Civil Code;

2. They caused the occurrence of the bankruptcy of the Company fraudulently or by fraudulent transactions.

The provisions of the last paragraph of Art. 216 shall in any case apply." (Appendix to Complaint for Extradition at pp. 171-73).

Since Dr. Pazienza was not an officer or director of the two bankrupts, he is charged under the general accomplice liability statute (Penal Law § 110). In addition he is charged under article 112 of the Penal Law (permitting increased punishment in case of "aggravating circumstances") and article 118 of the Penal Law ("Consideration of Aggravating or Extenuating Circumstances").

This Court has reviewed the authenticated documents submitted by the Republic of Italy in support of its request and finds that there is probable cause to believe that Pazienza committed the crimes with which he is charged.

The Investigating Judges of Milan have provided "summaries of the facts of the case, of the relevant evidence and of the conclusions reached," as provided in Article X of the Treaty. They also have supplied deposition transcripts of witnesses, including statements by Pazienza's co-defendants, Pellicani, Mazzotta, Carboni and Cassella, and statements made by Pazienza himself.

The evidence relied upon by the Milan court demonstrates that in the autumn of 1981, then bank president Roberto Calvi approved a loan by Banco Ambrosiano to Prato Verde, which was then engaged in the real estate investment business. According to the manager of the Rome subsidiary of the bank, Calvi instructed that manager to permit Prato Verde to draw against the loan proceeds before the loan had been approved officially and before any collateral had been posted. (Appendix at 88-90). The Milan court traced the loan installments, and concluded that most of the funds were never received by Prato Verde. Instead they flowed to Dr. Pazienza individually, and to others of the co-defendants named in the Milan warrant of February 25, 1985. According to statements by Pellicani, "essentially all the money which Mazzotta and Pazienza put into their pockets come from or are related to the loan of 6 billion liras granted by Banco Ambrosiano to Prato Verde, ... Pazienza used 350 or 400 million liras which were part of that sum of 1,200,000,000 we are talking about to pay part of the purchase price of a boat ... named the Giulia Settima." (Id. at 65-66). Mazzotta stated to the Italian prosecutor that Pellicani would draw checks on the Prato Verde account, cash them, and hand the cash to Mazzotta. (Id. at 67). Mazzotta then kept much of this money in his own account, "at Pazienza's disposal." (Id. at 69). We note in passing that these statements by Pazienza's co-defendants and other witnesses are not sworn testimony. For the most part they are recorded statements made to the Investigating Judges of the Milan court and to the Public Prosecutor after each authority delivered a warning to the declarant. Notwithstanding the evidentiary concerns expressed in Greci v. Birknes, 527 F.2d 956, 959-60 (1st Cir.1976), we...