U.S. v. Blum

• Decision Date: 02 August 1995
• Docket Number: D,No. 1592,1592
• Citation: 62 F.3d 63
• Parties: , 42 Fed. R. Evid. Serv. 1262 UNITED STATES of America, Appellee, v. Melvin BLUM, Defendant-Appellant, Charles Monteleone, Defendant. ocket 94-1622.
• Court: U.S. Court of Appeals — Second Circuit

Page 63

62 F.3d 63

41 ERC 1379, 42 Fed. R. Evid. Serv. 1262

UNITED STATES of America, Appellee, v. Melvin BLUM, Defendant-Appellant Charles Monteleone, Defendant.

No. 1592, Docket 94-1622.

United States Court of Appeals Second Circuit.

Argued May 31, 1995.

Decided Aug. 2, 1995.

Steven K. Frankel, New York City (Barry M. Fallick, Frankel Pariser & Rudder, New York City, of counsel), for appellant.

Martin Coffey, Asst. U.S. Atty., E.D.N.Y., Brooklyn (Zachary W. Carter, U.S. Atty., Susan Corkery, Asst. U.S. Atty., E.D.N.Y., Brooklyn, of counsel), for appellee.

Before: MESKILL, McLAUGHLIN and LAY, ^* Circuit Judges.

MESKILL, Circuit Judge:

Appellant Melvin Blum appeals from a judgment of conviction of the United States District Court for the Eastern District of New York, Mishler, J. The jury convicted Blum on five counts of a six count indictment alleging that Blum obstructed an investigation of the United States Environmental Protection Agency (EPA), principally through the submission of a false document to that agency. For the reasons set forth below, we affirm in part and reverse in part.

BACKGROUND

Melvin Blum was the president and principal of Burlington Bio-Medical and Scientific Corporation (Burlington), a manufacturer and distributor of various chemical products including Ro-Pel Animal, Rodent and Bird Repellant (Ro-Pel). On June 14, 1989 Vincent Palmer, a Pesticide Controller Specialist II and Case Review Officer of the New York State Department of Environmental Conservation (DEC), conducted an unannounced inspection of Burlington's facilities in Farmingdale, New York. Palmer was responding to a complaint from one of Burlington's competitors that Burlington had circulated a false and misleading advertisement claiming that Ro-Pel, a pesticide, was "non-hazardous and safe." Palmer testified that at this inspection he met with Blum, who informed him that no production of Ro-Pel occurred at its Farmingdale facility. Rather, Blum explained that the pesticide was formulated at a Burlington plant in Ohio and then sent to Reliance Packaging, Inc. (Reliance) in New Jersey for packaging. Blum further informed Palmer that the Farmingdale facility was solely responsible for the distribution of Ro-Pel, which was exported primarily to foreign markets. Believing that no production or packaging of Ro-Pel took place at the Farmingdale site, Palmer terminated the interview.

Under 7 U.S.C. Sec. 136e, any establishment producing a pesticide must register with the EPA. In order to aid in the monitoring, inspection and tracking of pesticides, the EPA assigns such registrants an "establishment number." Establishment numbers may be obtained on request from the EPA at no cost to the manufacturer, but the manufacturer must possess a number for each facility involved in the production of a pesticide. Additionally, the manufacturer also must obtain a "product registration number" for each pesticide it produces. See 7 U.S.C. Sec. 136a. Under the statute no pesticide may be sold, manufactured or distributed without both numbers prominently displayed on a product's label. See 7 U.S.C. Sec. 136j.

Subsequent to his first interview with Blum, Palmer purchased a bottle of Ro-Pel at a retail outlet. Palmer testified that not only did the sample bear an invalid establishment number, but the label indicated that the product was manufactured in Farmingdale, contrary to Blum's previous assertion. Additionally, after contacting Reliance Palmer discovered that no Ro-Pel ever had been packaged at their facilities in New Jersey. As a result of this contradictory information, Palmer arranged for a second on-site inspection of Burlington's Farmingdale facilities.

On July 26, 1989 Palmer and Ernest Schmaltz, an EPA Case Review Officer, conducted the second inspection of Burlington's Farmingdale facility and met with Blum and another Burlington employee, David Borovsky. Notwithstanding Blum's previous statement that Burlington did not manufacture Ro-Pel at its Farmingdale location, Palmer and Schmaltz were shown a full production facility. Blum explained that Burlington began producing Ro-Pel at the Farmingdale facility on June 22, 1989, eight days after Palmer's initial interview. As part of their investigation the two inspectors also reviewed Burlington's records relative to the manufacture of Ro-Pel, including a production logbook that contained such pertinent information as the quantities of raw materials acquired for the production of Ro-Pel, the dates of production, the amounts of Ro-Pel formulated, and the lot numbers assigned to each particular batch. The logbook confirmed that production at the Farmingdale facility did not begin until June 22, 1989. Significantly, however, the bottle of Ro-Pel purchased by Palmer nearly one month earlier listed Farmingdale as the place of manufacture. In response to Schmaltz's questioning on this point Blum once again asserted that prior to June 22, 1989, the company manufactured Ro-Pel in Ohio, with Reliance packaging the product in New Jersey.

Following the July inspection Borovsky left Burlington for another job. Subsequently Borovsky contacted EPA Special Agent Christopher Lillard, notifying him that Blum had deceived Palmer and Schmaltz during the second on-site inspection of Burlington, as the logbook examined by the two men was bogus. Borovsky explained that Blum had directed him to purchase a blank production logbook prior to the July 26 inspection and further instructed him to create entries to make it appear that all production of Ro-Pel at Farmingdale occurred after June 22, 1989. Borovsky then turned over the bogus production log to Lillard along with Burlington's Ro-Pel sales records, indicating that Burlington had been producing Ro-Pel at its Farmingdale location for several years prior to the June 14 inspection.

Following the meeting with Borovsky the government executed a search warrant at Burlington's Farmingdale facility. EPA agents seized the genuine production logbook, which reflected that Burlington began manufacturing Ro-Pel in 1983, six years prior to the date the company obtained an establishment number for its production. The EPA also determined, based on the logbook and the sales records supplied by Borovsky, that Burlington understated the quantities of Ro-Pel produced from 1988 to 1990 in pesticide production reports submitted to the EPA. Thereafter, Blum was indicted on charges of conspiring to obstruct, and obstructing, an EPA investigation in violation of 18 U.S.C. Secs. 371, 1505 and 3551 (Counts I and II); making false statements to Palmer and Schmaltz during the course of the investigation in violation of 18 U.S.C. Sec. 1001 (Count III); ¹ causing Borovsky to produce the false production logbook in violation of 18 U.S.C. Sec. 1001 (Count IV); filing false production reports with the EPA in violation of 18 U.S.C. Sec. 1001 (Count V); and producing a pesticide without an establishment number in violation of 7 U.S.C. Secs. 136e, 136j and 136l (Count VI).

The government's theory at trial was that Blum initially lied to Palmer about the production of Ro-Pel at Burlington's Farmingdale plant, and then attempted to cover up that falsehood by directing Borovsky to fabricate the production logbook. Thus, the government's case centered on Borovsky's testimony regarding the creation of the false production logbook.

Borovsky testified as follows. Prior to the July 26, 1989 inspection Blum informed him that the company was having a problem with the DEC. Specifically, Blum maintained that an inspector of that agency was on the payroll of a competitor that wanted to steal the confidential formula for Ro-Pel. Blum further told Borovsky that they needed to "throw [the inspector] off track." Therefore, Blum instructed Borovsky to purchase a new production logbook and create false entries for it as to the dates and amounts of Ro-Pel produced by Burlington. Blum, moreover, directed him to indicate that all production occurred after June 22, 1989. Borovsky then testified that on completion of the fabricated logbook Blum reviewed it, wrinkling and spilling coffee over it to make it appear "old." Blum further directed Borovsky to "white out" some of the entries "to make it look more real." According to Borovsky Blum's final instructions were that if Borovsky was asked for Burlington's production logbook on the date of the inspection he was to hand over the bogus logbook, which, of course, he did.

Blum's counsel vigorously challenged Borovsky on cross-examination, primarily by attacking his credibility. For example, it was established that Borovsky had been passed over for a promotion and demoted by Blum. Defense counsel further elicited from Borovsky that he was a user of cocaine and LSD and that he also had supplied both his girlfriend and her uncle with drugs while he worked for Blum. Additionally, Borovsky admitted that he received kickbacks from certain chemical suppliers. But Blum's most significant challenge to Borovsky's damaging testimony was intended to suggest that Borovsky falsified the production logbook for his own reasons and without Blum's knowledge. Specifically, Blum attempted to introduce the testimony of two witnesses that there were major misappropriations of supplies and materials at Burlington during Borovsky's tenure as production manager, thus providing Borovsky with an incentive to falsify the logbook to hide his own defalcations.

The government objected to the admission of this evidence, arguing that it was barred by Fed.R.Evid. 608, which prohibits the introduction of extrinsic evidence of misconduct or wrongful conduct to prove a witness' character. At oral argument before the district court on this issue Blum's counsel countered that:

This isn't a question of accusing [Borovsky] of a crime by collateral means, this is the reason the books and records were created, Your Honor. It goes right to the heart of this case.

The government said ......