U.S. v. Coffey

Decision Date29 March 2005
Docket NumberNo. 04-CR-651(ILG).,04-CR-651(ILG).
Citation361 F.Supp.2d 102
PartiesUNITED STATES of America, Plaintiff, v. Arthur COFFEY, Harold Daggett, Albert Cernadas and Lawrence Ricci, Defendants.
CourtU.S. District Court — Eastern District of New York

Roslynn A. Mauskopf, Taryn A. Merkl, Paul Weinstein, United States Attorney, Brooklyn, NY, for plaintiff U.S.

Jack Arsenault, Arsenault, Fassett and Mariano, Chatham, NJ, for defendant Albert Cernades.

Ernest H. Hammer, New York City, for defendant Arthur Coffey.

George Daggett, Daggett, Kraemer, Eliades, Vanderwiele & Ursin, Sparta, NJ, for defendant Harold Daggett.

Jeffrey Garrigan, Jersey City, NJ, for defendant Lawrence Ricci.


GLASSER, District Judge.


The grand jury returned a two count superseding indictment (the "indictment") against defendants Arthur Coffey ("Coffey"), Harold Daggett ("Daggett") and Albert Cernadas ("Cernadas") (collectively, "defendants"). Before the Court are various pretrial motions by defendants.1 Coffey and Daggett seek to join all motions made by codefendants to the extent that such motions are not inconsistent with their own.2 Therefore, to that extent, the Court will rule on the pending motions as if they were filed by all defendants.

The indictment arises out of the activities of the Genovese organized crime family, and specifically, defendants' (and the larger Genovese family's) control over the International Longshoremen's Association ("ILA") and several of its local unions and welfare benefit plans. The Government alleges that Coffey, Daggett and Cernadas were associates of the Genovese family, each belonging to "crews" that historically were located in Harlem and the Bronx, the Greenwich Village area of Manhattan, and northern New Jersey. (Indictment ¶¶ 5, 6). Defendants allegedly used their influence as associates of the Genovese family to, among other things, secure lucrative financial and powerful union positions within the ILA and its locals, thereby ensuring that the Genovese family could exercise a virtual stranglehold over the containerized shipping business in the ports of New York City, New Jersey and Miami, Florida. (Id. ¶¶ 7-10). Through their leadership positions within the ILA and in various welfare benefit plans, including the METRO-ILA Fund, the Local 1922-1 Fund, and the Southeast Ports Fund (collectively, the "Funds"),3 defendants enriched themselves and the extended Genovese family network by controlling the grant of service contracts entered into by the Funds, to the detriment of the Funds and the rank and file membership of the ILA and its locals. (Id. ¶¶ 8-10).

In addition, the indictment alleges, inter alia, that defendants championed changing the service provider for the prescription pharmaceutical benefit program for the MILA and METRO-ILA funds to GPP/VIP, Inc. ("GPP/VIP"), because this entity was associated with organized crime. (Indictment ¶ 16). Defendants did not disclose this relationship in their dealings with the MILA and METRO-ILA Fund. (Id.) Defendants also "secretly agreed" that the contract for mental health care services offered to plan members receiving benefits from the MILA, METRO-ILA, Local 1922-1 and Southeast Port Funds should be awarded to Compsych "because that company paid an associate of organized crime." (Id. ¶ 15).

Against this background, count one of the indictment charges Coffey and Daggett with extortion conspiracy in violation of the Hobbs Act, 18 U.S.C. § 1951(a). Count two of the indictment charges defendants with mail and wire fraud conspiracy in violation of 18 U.S.C. §§ 1341, 1343, 1346.

The pre-trial motions which defendants filed are as follows: (a) motion to dismiss count one of the indictment because it refers to intangible rights and is duplicitous; (b) motion to dismiss count two of the indictment because it does not allege a viable claim and because 18 U.S.C. § 1346 is void for vagueness; (c) motion to sever claims; (d) motion to require the Government to file a bill of particulars; (e) motion to strike surplusage from the indictment; (f) motion to grant a pre-trial hearing to determine the admissibility of co-conspirator statements; (g) motion to require the Government to provide a witness list 30 days before trial; and (h) motion to change case designation as related to United States v. Gotti and not United States v. Bellomo and to allow defendants access to grand jury minutes.

For the reasons set forth below, defendants' motions are denied.

I. Motion To Dismiss Count One of the Indictment

Daggett and Coffey move to dismiss count one of the indictment for extortion conspiracy under the Hobbs Act to the extent that it refers to intangible rights and because they contend that it is duplicitous. Each argument is discussed in turn.

A. Intangible Rights Under the Hobbs Act

Daggett and Coffey move to dismiss count one of the indictment to the extent that it alleges that they and their co-conspirators agreed "to obtain property, to wit: money and the right to pursue lawful business, from owners, officers, employees and agents of businesses operating at the piers in the New York City metropolitan area, northern New Jersey and Miami, Florida." (Indictment ¶ 12; Daggett Mem. at 6). The Hobbs Act provides that "[w]hoever in any way or degree obstructs ... or affects commerce ... by ... extortion or attempts or conspires so to do, or commits or threatens physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section shall be fined under this title or imprisoned not more than twenty years, or both." 18 U.S.C. § 1951(a). "Extortion means the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right." Id. § 1951(b)(2); see generally Stirone v. United States, 361 U.S. 212, 215, 80 S.Ct. 270, 4 L.Ed.2d 252 (1960) (Hobbs Act "speaks in broad language, manifesting a purpose to use all the constitutional power Congress has to punish interference with interstate commerce by extortion, robbery or physical violence").

Defendants contend that under the United States Supreme Court's decision in Scheidler v. National Organization of Women, 537 U.S. 393, 123 S.Ct. 1057, 154 L.Ed.2d 991 (2003), they were unable to "obtain" "the right to pursue [the] lawful business" of others and thus did not commit "extortion" as that phrase is defined in 18 U.S.C. § 1951(b)(2).4 (Id.) Although they do not cite it, defendants presumably seek to rely on United States v. Bellomo, 263 F.Supp.2d 561, 574-76 (E.D.N.Y.2003) (Glasser, J.), in which I granted a motion to dismiss Hobbs Act counts to the extent they were based on the extortion of union members' rights to nominate and elect union officers under 29 U.S.C. §§ 411 and 501 of the Labor Management Reporting and Disclosure Act ("LMRDA"). In analyzing the impact of Scheidler, I held that since Title 29 prohibited voting by proxy, a union member's rights under the LMRDA could not be "exercised, transferred or sold" by the defendants and therefore were not "obtainable" under Scheidler.5 Id.

I am now asked to revisit this issue though with a different property right before me. As was the case in Bellomo, however, the fundamental question that I must answer is the same. The issue is not whether the "right to pursue lawful business" is property, but whether it is "property that is obtainable." Bellomo, 263 F.Supp.2d at 575. In Bellomo, I found persuasive the fact that the property right at issue — the union member's ability to nominate and elect his officers — could not, as a matter of law, be exercised, transferred or sold. Id. at 575-76 (citing 29 U.S.C. §§ 402(k), 481(b)). In this case, by contrast, the "property" at issue is the right to pursue lawful business. As alleged in the indictment, Daggett and Coffey conspired to use "actual and threatened force, violence and fear" to usurp business opportunities for the Genovese family (with which both Daggett and Coffey are alleged to be associated) that otherwise would have been acquired by third parties who would be free from the influence of the Genovese family. (Indictment ¶ 12).

Accordingly, in Bellomo, my decision rested firmly on the conclusion that the property interest at issue there, by law, could not be transferred. In contrast, defendants' counsel has not referred to any authority for the proposition that the "right to pursue lawful business" cannot be exercised, transferred or sold. Particularly apposite to this case is the Second Circuit's decision in United States v. Tropiano, 418 F.2d 1069, 1076 (2d Cir.1969), cert. denied, 397 U.S. 1021, 90 S.Ct. 1258, 25 L.Ed.2d 530 (1970).6 In Tropiano, the defendants were partners in a sanitation removal company known as C & A. When Caron Refuse Removal, Inc. replaced C & A in servicing some of C & A's customers, the defendants by threats of violence forced Caron Refuse to cease further attempts to acquire C & A's customers and to consent not to solicit any more business in that area. The Second Circuit held that the property extorted was the right of Caron Refuse to solicit business free of territorial restrictions wrongfully imposed by its competitors. 418 F.2d at 1076. This holding is directly relevant here: the loss of the right to solicit accounts and bid for contracts constitutes the requisite economic loss under the Hobbs Act, which "includes, in a broad sense, any valuable right considered as a source or element of wealth.... The right to pursue a lawful business including the solicitation of customers necessary to the conduct of such business has long been recognized as a property right within the protection of the Fifth and Fourteenth Amendments of the Constitution." Id. (citations omitted). The Court thus agrees with the Government that here, as in Tropiano, the...

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