People v. Rallo

• Decision Date: 28 January 1975
• Docket Number: Nos. 1,s. 1
• Parties: , 77 Lab.Cas. P 53,776 PEOPLE of the State of New York, Appellant, v. Vincent J. RALLO et al., Respondents. PEOPLE of the State of New York, Appellant, v. Vincent J. RALLO and Vincent A. Verrone, Respondents, Lawrence D. Chesler, Defendant. PEOPLE of the State of New York, Appellant, v. Vincent J. RALLO and Vincent A. Verrone, Respondents. PEOPLE of the State of New York, Appellant, v. Vincent A. VERRONE, Respondent. PEOPLE of the State of New York, Appellant, v. Vincent J. RALLO, Respondent. PEOPLE of the State of New York, Appellant, v. Vincent J. RALLO, Respondent, Marcella Rallo, Defendant. PEOPLE of the State of New York, Appellant, v. Samuel VILLONE, Respondent. PEOPLE of the State of New York, Appellant, v. Vincent J. RALLO and Vincent A. Verrone, Defendants, Lawrence D. Chesler, Respondent. PEOPLE of the State of New York, Appellant, v. Lawrence D. CHESLER, Respondent. Appealthourgh 9.
• Court: New York Supreme Court — Appellate Division

Page 851

363 N.Y.S.2d 851

46 A.D.2d 518, 77 Lab.Cas. P 53,776

PEOPLE of the State of New York, Appellant, v. Vincent J. RALLO et al., Respondents.

PEOPLE of the State of New York, Appellant, v. Vincent J. RALLO and Vincent A. Verrone, Respondents, Lawrence D. Chesler, Defendant.

PEOPLE of the State of New York, Appellant, v. Vincent J. RALLO and Vincent A. Verrone, Respondents.

PEOPLE of the State of New York, Appellant, v. Vincent A. VERRONE, Respondent.

PEOPLE of the State of New York, Appellant, v. Vincent J. RALLO, Respondent.

PEOPLE of the State of New York, Appellant, v. Vincent J. RALLO, Respondent, Marcella Rallo, Defendant.

PEOPLE of the State of New York, Appellant, v. Samuel VILLONE, Respondent.

PEOPLE of the State of New York, Appellant, v. Vincent J. RALLO and Vincent A. Verrone, Defendants, Lawrence D. Chesler, Respondent.

PEOPLE of the State of New York, Appellant, v. Lawrence D. CHESLER, Respondent.

Appeal Nos. 1 thourgh 9.

Supreme Court, Appellate Division, Fourth Department.

Jan. 28, 1975.

Maxwell B. Spoont, Acting Deputy Atty. Gen., Rochester, for appellant (John P. Mansour, Rochester, of counsel)

Charles F. Crimi, Rochester, for respondent Chesler.

Norman A. Palmiere, Rochester, for respondent Verrone (Herald P. Fahringer, Buffalo, of counsel).

Thomas G. Presutti, Rochester, for respondent Vincent J. Rallo.

Anthony F. Leonardo, Jr., Rochester, for respondents Franklin and Joseph Rallo.

George W. Conaty, Jr., Rochester, for respondent Samuel Villone.

Before MARSH, P.J., and MOULE, MAHONEY, GOLDMAN and DEL VECCHIO, JJ.

OPINION

MARSH, Presiding Justice:

The Deputy Attorney General in Charge of the Organized Crime Task Force ('Deputy Attorney General') appeals from eight orders of Supreme Court, Monroe County, dismissing eight indictments against respondents Vincent Rallo, Franklin Rallo, Joseph Rallo, Vincent Verrone, Samuel Villone, and Lawrence Chesler.

The indictments were returned by a Monroe County Special Grand Jury conducted by the Deputy Attorney General. The authority for the Attorney General or his Deputy to appear before a grand jury in such cases is set forth in section 70--a of the Executive Law. Pursuant to Executive Law, § 70--a, the Governor of New York and the Monroe County District Attorney gave their approval to the Deputy Attorney General to appear before the Special Monroe County Grand Jury and conduct these proceedings relating to 'any occurrence directly or indirectly involving or affecting either Barbers Realty & Holding Corporation ('Barbers Realty') . . . or Journeymen Barbers International Union, Local No. 246 ('Local 246'), or any officers, employees, agents or persons associated with any of the foregoing . . . and any attendant matters or charges related thereto . . .'. Respondents contend, and Special Term found, that the criminal activities investigated in these proceedings were not within the purview of section 70--a, that there was no authority for the Deputy Attorney General to appear before the grand jury and that therefore the indictments returned were defective and warranted dismissal, citing CPL 190.25; CPL 210.35(5).

While the Legislature's recognition of the need for the enlargement of prosecutorial authority capable of dealing with the diversity of activities of organized crime as related in 'Legislative Findings', section 1 of L.1970, c. 1003, is based on a general description of organized crime and organized criminal activities sufficiently broad to include the 'Appalachian' associates, the 'Luciano' mob, the fictional 'Godfather' characters and other readily recognizable historical 'mob' figures well-known for their drug dealing, hijacking, labor racketeering and other illegal activities, the legislative implementation and statutory scheme found in section 70--a is very specific in its definition of the authority and duties of the 'State-wide organized crime task force'. Thus, the specific authority of the Deputy Attorney General in charge of the organized crime task force, empowered by subdivision 1 of section 70--a to conduct investigations and prosecution of organized crime activities carried on between two or more counties of the State is set forth in subdivision 7 of section 70--a as follows:

'With the approval of the governor and with the approval or upon the request of the appropriate district attorney, the deputy attorney general in charge of the organized crime task force, or one of his assistants, may attend in person any term of the county court or supreme court having appropriate jurisdiction . . . or appear before the grand jury thereof, for the purpose of managing and conducting in such court or before such jury a criminal action or proceeding concerned with an offense where any conduct constituting or requisite to the completion of or in any other manner related to such offense occurred either in two or more counties of this state, or both within and outside this state. In such case, such deputy attorney general or his assistant so attending shall exercise all the powers and perform all the duties in respect of such actions or proceedings, which the district attorney would otherwise be authorized or required to exercise or perform. . . .'

Special Term found, after considering the grand jury minutes, that '(t)here is nothing before the Grand Jury by way of evidence which I do not say is necessary or by way of preliminary statement, or in any other way, indicating that this prosecution was against or in aid of the local District Attorney's efforts against organized crime', nor did it find any testimony in the minutes that any of these acts occurred outside Monroe County; thus, it concluded, there was no basis for the appearance of the Attorney General or his Deputy before the Special grand jury.

These indictments arise out of the misappropriation of hospitalization funds belonging to Local 246, of which Vincent Verrone was the head, to the use of Barbers Realty, of which Vincent Verrone was President and Vincent Rallo was Secretary. Barbers Realty was formed to construct a housing project known as the 'Landings' apartments in Greece, Monroe County, New York. Both Local 246 and Barbers Realty are local Monroe County organizations. All defendants herein are Monroe County residents. The evidence presented to the grand jury, the minutes of which are an exhibit in the record on appeal, show that the principals of Barbers Realty, via a series of fraudulent and larcenous schemes, diverted the funds of Barbers Realty to their own personal use, and that the use of Local 246's hospitalization funds for such project was never authorized. The principal lender after mortgage consolidation was Sackman-Gilliland, a Brooklyn corporation. The construction loan agreement between Barbers Realty and Sackman-Gilliland was negotiated and concluded in Kings County. The broker who arranged the financing for Barbers Realty was a New York City resident. Some transactions in an effort to arrange financing for the construction project took place in Florida. There was evidence in the grand jury minutes to show that fraudulent practices were employed in securing Sackman-Gilliland's continued support for the project.

Indictment 357--A charged Vincent Rallo, Vincent Verrone, Joseph Rallo, and Franklin Rallo, with Perjury, Making an Apparently Sworn False Statement, Offering a False Instrument for Filing, and Conspiracy, all in connection with a false notice of mechanic's lien filed by defendants as Rallo Brothers Trucking, Inc. against Barbers Realty.

Indictment 373--A charged Vincent Rallo, Vincent Verrone and Lawrence Chesler with Grand Larceny, violation of Article 3--A of the Lien Law, and Conspiracy in connection with the diversion of trust funds of Barbers Realty for other than valid trust purposes.

Indictment 356--A charged Vincent Verrone and Vincent Rallo with Grand Larceny, Perjury, Conspiracy, Improper Practices under the Labor Law, and Criminal Possession of Stolen Property, relating to funds stolen from Local 246's Hospitalization Fund bank account.

Indictment 358--A charged Vincent Verrone with Falsifying Business Records, Forgery, Criminal Possession of a Forged Instrument, and Grand Larceny, in connection with the issuance of a forged check on Local 246.

Indictment 359--A charged Vincent J. Rallo with Forgery, Criminal Possession of a Forged Instrument, and Offering a False Instrument for Filing, in connection with uttering a forged satisfaction to comply with Lien Law § 19(1).

Indictment 360--A charged Vincent Rallo and Marcella Rallo with violation of the New York State Tax Laws. The charges against Marcella Rallo were dismissed and are not the subject of this appeal.

Indictment 362--A charged Samuel Villone with Perjury.

Indictment 361--A charged Lawrence Chesler with Criminal Facilitation in connection with the diversion of the trust funds of Barbers Realty.

The indictments against Chesler were dismissed by the court below on the ground of insufficient evidence before the grand jury to sustain them, and the lower court order also denied the motion to resubmit the evidence to another grand jury. This dismissal of two indictments against Chesler is also the basis of appeals herein.

The indictments against the remaining defendants were dismissed on the ground that the Deputy Attorney General was an unauthorized person to appear before the grand jury within the meaning of Criminal Procedure Law § 190.25 and that this so prejudiced the grand jury indictments that dismissal pursuant to CPL § 210.35 was warranted. This dismissal was without prejudice to represent the evidence to the same or to a new grand jury to be conducted by the District Attorney rather than the Deputy Attorney General.

Lawrence Chesler, whose office is in Rochester, was the attorney for Barbers Realty. For eight months he kept the funds of Barbers Realty in his law firm's trust account and issued checks thereon at the order of Verrone and Rallo...