U.S. v. Attanasio

• Citation: 870 F.2d 809
• Decision Date: 15 March 1989
• Docket Number: D,453,520,Nos. 541,s. 541
• Parties: UNITED STATES of America, Appellee, v. Louis J. ATTANASIO, Marie L. Attanasio, Joseph Valentino, Defendants, Robert J. Mallon, Robert Attanasio, Francis S. LaMagra, Defendants-Appellants. ockets 88-1293, 88-1307, 88-1342.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 809

870 F.2d 809

UNITED STATES of America, Appellee, v. Louis J. ATTANASIO, Marie L. Attanasio, Joseph Valentino, Defendants, Robert J. Mallon, Robert Attanasio, Francis S. LaMagra,

Defendants-Appellants.

Nos. 541, 453, 520, Dockets 88-1293, 88-1307, 88-1342.

United States Court of Appeals, Second Circuit.

Argued Dec. 15, 1988.

Decided March 15, 1989.

Herald Price Fahringer, New York City (Diarmuid White, Michael B. Pollack, Lipsitz, Green, Fahringer, Roll, Schuller & James, New York City, of counsel), for defendant-appellant LaMagra.

Mark A. Summers, New York City (Charles L. Weintraub, Hoffman & Pollok, New York City, of counsel), for defendant-appellant Mallon.

Jeffrey A. Rabin, Brooklyn, N.Y., for defendant-appellant Robert Attanasio.

Ruth A. Nordenbrook, Asst. U.S. Atty. (Andrew J. Maloney, U.S. Atty., E.D.N.Y., Emily Berger, Asst. U.S. Atty., Brooklyn, N.Y., of counsel), for appellee.

Before MESKILL, PIERCE and MINER, Circuit Judges.

MINER, Circuit Judge:

Appellants Robert J. Mallon, Robert J. Attanasio and Francis S. LaMagra challenge their judgments of conviction entered in the United States District Court for the Eastern District of New York (Mishler, J.), following a jury trial. They were jointly tried, along with three other defendants, for two conspiracies to impede the Internal Revenue Service ("IRS") in the ascertainment, computation, assessment and collection of income taxes and for various substantive counts, including submitting, and aiding and abetting the submission of, materially false income tax returns and obstructing justice. Because each appellant was charged with only one of the two conspiracies, each made a pretrial motion for severance. These motions were denied. Appellants here challenge those rulings, arguing, inter alia, that the conspiracies were separate and distinct. Robert Attanasio challenges, as well, the denial of his motion for severance made at the close of the government's case; he contends that co-defendant Valentino would provide exculpatory testimony only at a separate trial.

Additionally, LaMagra and Mallon contend that there was a constructive amendment of the indictment and that, as a result, the government did not prove the essential nature of the conspiracy with which they were charged. Appellants challenge also the "two-inference" jury charge given by the district court.

For the reasons detailed below, we affirm the judgments of conviction.

BACKGROUND

A. Facts

Six defendants were involved in the conspiracies charged in the indictment: Louis J. Attanasio (brother of appellant Robert Attanasio), Marie L. Attanasio (Louis' wife), Joseph Valentino, and the three appellants.

1. See-Clear Conspiracy

Valentino was the acting vice-president of the See-Clear Maintenance Corporation ("See-Clear"), which provided maintenance services at the U.S. Coast Guard facility on Governor's Island in New York Harbor. At Valentino's behest, both Louis and Robert Attanasio were placed on the See-Clear payroll. Louis and Robert claimed their wages as income on their tax returns, filed jointly with their respective spouses, for the years 1981-1983; they attached to the returns W-2 forms furnished by See-Clear.

There was evidence, however, that neither Louis nor Robert worked at See-Clear. For instance, Wilfred Allen, the shop steward for the union to which all See-Clear employees on the Island were required to belong, testified that he never heard of Louis or Robert Attanasio, and that he did not recognize them in the courtroom. Charles W. Smith, the president and owner

of See-Clear, testified that he never had met Robert until they were arraigned together and that Louis did not work for See-Clear. He further testified that when he discovered Robert Attanasio's name on the payroll, Valentino told him Robert was a cleaner on Governor's Island and that Robert was not related to Louis Attanasio.

2. Capital Gains Conspiracy

This conspiracy involved two fraudulent transactions reported on the joint tax returns of Louis and Marie Attanasio ("Attanasios") filed for the years 1983-1984. The 1983 return indicated a long-term capital gain of $250,000 from a sale of C & L Tool Company ("C & L") stock, which, according to the return, had been acquired years earlier for $50,000. Similarly, the 1984 return showed a capital gain of $291,000 from a sale of "Injection Molds." The Attanasios reduced their tax liability substantially by treating these transactions as capital gains rather than as ordinary income. The transactions were in fact fabricated, as the following discussion will illustrate.

a. The C & L Transaction

During the relevant period, Mallon practiced law in New Jersey and performed all the legal work for Donato Sardella, the owner of C & L. Sardella testified that, in 1981, he transferred some of his stock in C & L to an unknown woman named "Maria" [sic], who, Mallon told him, would take C & L public. Sardella received no money for this transfer. When the proposed public offering did not materialize, Sardella signed, at the direction of Mallon, a stock repurchase agreement.

A paper trail was orchestrated by Mallon to create the impression that Sardella paid Louis and Marie Attanasio for the repurchase. Sardella testified that Mallon persuaded him to write checks to Mallon and to the "Robert J. Mallon, Esq. Trust Account" in return for cash. Mallon caused additional funds to be deposited into the trust account. For example, he deposited cash and checks that he had third-parties write to Sardella, which Sardella endorsed. (Sardella did not receive the proceeds of these checks, though he was paid $5,000 for his part, $1,000 of which he returned to Mallon.) LaMagra, a financial consultant purportedly involved in taking C & L public, contributed approximately $100,000 to the trust account. Mallon subsequently withdrew the funds from the trust account by writing checks worth $300,000 to, or for the benefit of, Louis and Marie Attanasio. Subtracting the $50,000 that they allegedly paid for the C & L stock in 1981, the Attanasios reported the proceeds from this spurious stock repurchase as the $250,000 capital gain on their 1983 tax return.

b. The Injection Mold Transaction

Mallon also performed legal services for Richard Niclaus, who was involved in the plastic molding business. At some time in 1984, Mallon asked Niclaus if he had any injection molds to sell. Niclaus replied that he had three "dead molds"--molds for which there was no commercial demand and worth only their weight as scrap, i.e., $100,000. Mallon thereafter presented Niclaus with three bills of sale indicating a sale of the molds from Marie Attanasio to Niclaus for $300,000. Niclaus testified that he did not pay this money, but rather received $2,000 cash.

In early 1984, approximately $304,000 was deposited to another Mallon trust account. Again, much of this amount originated from LaMagra. $300,000 of this escrow money then was issued by Mallon to Marie Attanasio. All these checks were deposited, negotiated or cashed by Marie and Louis Attanasio, who then reported these proceeds on their 1984 tax return as the $291,000 capital gain.

3. Preparation of the Tax Returns

LaMagra provided financial data regarding Louis Attanasio's See-Clear salary and the capital gains transactions to Jerrold Berr, who used the information to prepare Louis and Marie Attanasio's 1983 and 1984 tax returns. (Berr testified that he thought that he was preparing draft work-ups merely to help the Attanasios assess their tax liability.) LaMagra also signed the name of Paul S. Roden, Jr., an accountant

who had suffered a disabling stroke early in 1983, as the preparer of the 1983 return, and his own name as the preparer of the 1984 return.

B. The Indictment

The "Introduction" of the indictment states that Louis Attanasio "received substantial income from loansharking and conducting an illegal gambling business." Count 1 of the indictment charges Louis Attanasio, Robert Attanasio and Valentino with the See-Clear conspiracy, i.e., conspiring to defraud the IRS by impairing the ascertainment, computation, assessment and collection of the income taxes owed by Louis and Robert Attanasio for the years 1981-1983, in violation of 18 U.S.C. Sec. 371.

Count 2 charges Louis and Marie Attanasio and appellants Mallon and LaMagra with the capital gains conspiracy. The opening paragraph of this count alleges a conspiracy to defraud the IRS "by impairing, obstructing and defeating its lawful government function of the ascertainment, computation, assessment, and collection of the revenue, namely income taxes of LOUIS J. and MARIE L. ATTANASIO for the calendar years 1983 and 1984." A subheading, "Means of the Conspiracy," follows, and reads in part:

Among the manner and means by which the defendants would and did carry out the objects of the conspiracy and insure the success of their venture were the following:

(A) It was a part of the aforesaid conspiracy that the defendants sought to conceal a substantial source and amount of income of the defendants LOUIS J. ATTANASIO and MARIE L. ATTANASIO.

(B) It was a further part of the aforesaid conspiracy that, in order to provide the defendants LOUIS J. ATTANASIO and MARIE L. ATTANASIO with a claimed source of legitimate income to explain and support expenditures, the defendants created false capital gains transactions for the defendants LOUIS J. ATTANASIO and MARIE L. ATTANASIO for the years 1983 and 1984 and laundered approximately $600,000.00 through attorney trust accounts maintained in whole or in part by the defendant ROBERT J. MALLON.

Overt acts then are listed under a separate subheading, and the count closes by charging a violation of 18 U.S.C. Secs. 371 & 3623. The remaining counts, Counts 3-10, consist of sundry substantive charges relating to the two conspiracies.

C. The District Court

1. Rulings

Prior to trial, each appellant moved for severance of the counts on the ground that ...