U.S. v. Bortnovsky, s. 650

• Decision Date: 27 June 1989
• Docket Number: D,Nos. 650,651,s. 650
• Citation: 879 F.2d 30
• Parties: 28 Fed. R. Evid. Serv. 380 UNITED STATES of America, Appellee, v. Alexander BORTNOVSKY, a/k/a "Sasha," and Leonid Braz, Defendants-Appellants. ockets 88-1410, 88-1411.
• Court: U.S. Court of Appeals — Second Circuit

Page 30

879 F.2d 30

28 Fed. R. Evid. Serv. 380

UNITED STATES of America, Appellee, v. Alexander BORTNOVSKY, a/k/a "Sasha," and Leonid Braz,

Defendants-Appellants.

Nos. 650, 651, Dockets 88-1410, 88-1411.

United States Court of Appeals, Second Circuit.

Argued Jan. 9, 1989.

Decided June 27, 1989.

Elizabeth Glazer, New York City, Asst. U.S. Atty. for the S.D.N.Y. (Benito Romano, U.S. Atty., Kerry Martin Bartlett, Asst. U.S. Atty., of counsel), for appellee.

Julia Pamela Heit, New York City, Heit & Grant, for defendant-appellant, Alexander Bortnovsky.

Michael H. Soroka, Garden City, N.Y., for defendant-appellant, Leonid Braz.

Before VAN GRAAFEILAND and MINER, Circuit Judges, and LASKER, District Judge. ^*

LASKER, District Judge:

Alexander Bortnovsky and Leonid Braz appeal from their judgments of conviction entered on September 15, 1988 for conspiracy to conduct the affairs of an enterprise through a pattern of racketeering in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. Sec. 1962(d) (count one); participation in the affairs of an enterprise through a pattern of racketeering in violation of Sec. 1962(c) of RICO (count two); and mail fraud in violation of 18 U.S.C. Sec. 1341 (count nine). The defendants challenge the conduct of the government during trial, the admissibility of certain evidence, the legal sufficiency of the convictions arising under the mail fraud statute and RICO, and the legality of their sentences. The decision below is affirmed in all respects but one: the case is remanded for the limited purpose of correcting the sentences.

I. BACKGROUND

In the summer of 1988, defendants Bortnovsky and Braz were tried for conspiracy to participate and actual participation in the affairs of an enterprise through a pattern of racketeering ("the RICO counts") and for a single count of mail fraud. ¹ Prior to trial, count three, charging the defendants with conspiracy to defraud the federal government by filing false claims with the Federal Emergency Management Administration ("FEMA"), and counts four through eight, each of which involved an allegation of mail fraud, were dismissed as barred by the statute of limitations. United States v. Bortnovsky, 683 F.Supp. 449 (S.D.N.Y.1988).

In connection with their ownership of two clothing stores, Braz and Bortnovsky were alleged to have engaged in a number of schemes to defraud the agencies that insured their businesses; these schemes constituted the RICO predicate acts. In answer to special interrogatories, the jury found both defendants to have participated in the arson of one of their stores on August 25, 1981 (predicate act one) and mail fraud for the subsequent filing with the New York Property Insurance Underwriters Association ("NYPIUA") of a claim for over $100,000 for losses resulting from the fire (predicate act two). In addition, the jury found the government to have proven Braz's participation in yet another predicate act, namely mail fraud for filing a claim with the Federal Crime Insurance Program ("FCIP") for coats alleged to have been stolen during a burglary of one of the stores (predicate act three). Neither Braz nor Bortnovsky were found to have engaged in a scheme to stage burglaries of their stores and thereafter file fictitious claims (predicate act four).

Braz's post-trial motion for a new trial, based on the court's exclusion of a document supporting Braz's contention that he had received the coats whose alleged theft was the basis of his FCIP claim, was denied. Bortnovsky and Braz were respectively sentenced to concurrent terms of six and eight years' imprisonment on all counts; each also was sentenced to two years of probation following release from custody and ordered to pay $5,225 in restitution.

On appeal, the defendants contend that: 1) the government knowingly introduced and relied on perjured testimony, 2) the court improperly excluded from evidence an exculpatory report, ² 3) the government's proof was insufficient as a matter of law to establish that the defendants had committed mail fraud, 4) the government failed to prove a pattern of racketeering necessary for the RICO counts, and 5) the sentences were invalid as a matter of law in several respects, some of which the government concedes.

II. DISCUSSION

A. GOVERNMENT'S USE OF PERJURED TESTIMONY

At trial, the government elicited the opinion of Fire Marshal George W. Powell that the fire of August 25, 1981, the basis of predicate act one, had been intentionally set. He testified that he reached this conclusion because he smelled gasoline on the clothes of Angel Guzman, who died in the fire and whose remains were found during the excavation. The defendants maintain that this testimony was false, that the government knew it to be such, and that, accordingly, the conviction must be reversed and a new trial granted. They premise their argument that Powell's testimony was "palpably false" on his failure to state in reports of his investigation of the fire or in earlier testimony that he had smelled gasoline on Guzman's clothing. This argument lacks merit.

Powell's earlier silence provides an insufficient basis upon which to find that the later testimony was false. At most, Powell's testimony differed from, but did not contradict, what he said earlier. However, even if this testimony had conflicted directly with that given previously, the difference alone would not constitute perjury.

Presentation of a witness who recants or contradicts his prior testimony is not to be confused with ... perjury. It was for the jury to decide whether or not to credit the witness.

United States v. Holladay, 566 F.2d 1018, 1019 (5th Cir.) (per curiam), cert. denied, 439 U.S. 831, 99 S.Ct. 108, 58 L.Ed.2d 125 (1978). See also United States v. Hemmer, 729 F.2d 10, 17 (1st Cir.) (inconsistencies between witness's statements before grand jury and at trial do not warrant inference that government knowingly used false testimony), cert. denied, 467 U.S. 1218, 104 S.Ct. 2666, 81 L.Ed.2d 371 (1984); United States ex rel. Burnett v. Illinois, 619 F.2d 668, 674 (7th Cir.) ("Contradictory testimony does not constitute perjury.") (footnote omitted), cert. denied, 449 U.S. 880, 101 S.Ct. 229, 66 L.Ed.2d 104 (1980). Nor does the fact that Powell's testimony conflicted with that of the defendants' expert at an earlier trial support an inference of perjury. ³ Cf. United States v. Miranne, 688 F.2d 980, 989 (5th Cir.1982) (differing testimony of two government witnesses presented at most a credibility question for the jury), cert. denied, 459 U.S. 1109, 103 S.Ct. 736, 74 L.Ed.2d 959 (1983); United States v. Brown, 634 F.2d 819, 827 (5th Cir.1981) (proof that "testimony is challenged by another witness or is inconsistent with prior statements" is insufficient to establish due process violation). Powell's failure to report the smell of gasoline on Guzman's clothing earlier was at most a point for the defense counsel to place before the jury for its resolution.

Moreover, even if Powell's prior silence were to establish that his testimony was perjured, the defendants could not prevail because there is no evidence that the government knew or should have known the testimony to be false. ⁴ United States v. Holladay, 566 F.2d at 1019 (affirming conviction where there was no evidence that prosecution knew or believed testimony to be false); United States v. Miranne, 688 F.2d at 989 (reversal not warranted where there was no evidence that government had "actual or constructive knowledge of the alleged perjury").

B. EXCLUSION OF EXHIBIT G

The indictment alleged as the third predicate act that Braz's insurance claim of February, 1980 for the theft of sheepskin coats from the store was fraudulent because the coats were not delivered until September, 1980. In response to evidence introduced by the government in support of its argument, Braz sought to introduce defendant's exhibit G, the report of the insurance adjuster. The report stated in relevant part: "We questioned a Mr. David Belsky of the firm Damer Sheepskin Fashions [the supplier] who advised that the goods were delivered to the assured on January 19, 1980, but to date they had not been paid for by the assured." The district court held that the document was not admissible under either Fed.R.Evid. 803(6) as a business record, Fed.R.Evid. 803(8) as a public record, or Fed.R.Evid. 803(24) or 804(b)(5), which provide generally for admission of documents not covered by other exceptions "but having equivalent circumstantial guarantees of trustworthiness." We conclude that this exclusion was not, as Braz argues, an abuse of discretion. ⁵ See United States v. Salvador, 820 F.2d 558, 561 (2d Cir.), cert. denied, --- U.S. ----, 108 S.Ct. 458, 98 L.Ed.2d 398 (1987). Nor was the decision denying Braz's Rule 33 motion--for a new trial based on the document's exclusion or, in the alternative, for a hearing as to its reliability--reversible error.

Although Braz speaks of the entire document, the real issue is the admissibility not of exhibit G itself, but of the statement of Belsky it contains. Therefore, to prevail on his argument, Braz must establish not only that the report falls within an exception to the hearsay rule, but also that Belsky's statement is covered by such an exception. Braz has failed to do the latter.

Although the adjuster's report might otherwise qualify as a business record within the meaning of Rule 803(6), Belsky's statement does not satisfy the rule's requirements because there was no showing that he had a duty to report the information he was quoted as having given. See United States v. Meyers, 847 F.2d 1408, 1412 (9th Cir.1988) (holding exhibit summarizing surveillance activity was admissible because there was no evidence report "improperly incorporated the statements of third persons under no business duty to report"); United States v. Snyder, 787 F.2d 1429, 1434 (10th Cir.) (affirming exclusion of report...