U.S. v. DeGeratto
| Decision Date | 08 June 1989 |
| Docket Number | No. 88-2815,88-2815 |
| Parties | 28 Fed. R. Evid. Serv. 513 UNITED STATES of America, Plaintiff-Appellee, v. Phillip DeGERATTO, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Kevin E. Milner, Asst. U.S. Atty., Hammond, Ind., for plaintiff-appellee.
Thomas P. Sullivan, Charles B. Sklarsky, Jenner & Block, Paul T. Julian, Julian & Associates, Adam Bourgeois, Chicago, Ill., for defendant-appellant.
Before WOOD, Jr., and MANION, Circuit Judges, and FAIRCHILD, Senior Circuit Judge.
What should have been an ordinary prosecution for transporting and receiving stolen property was not.
On December 14, 1987, a federal grand jury returned a nine-count indictment against defendant Phillip DeGeratto. * Count 1 charged DeGeratto with conspiracy relating to the interstate transportation and receipt of stolen property in violation of 18 U.S.C. Sec. 371. Counts 2, 5 and 8 charged DeGeratto with interstate transportation of a stolen motor vehicle in violation of 18 U.S.C. Sec. 2312. Counts 3, 6 and 9 each charged DeGeratto with interstate transportation of stolen goods in violation of 18 U.S.C. Sec. 2314. Counts 4 and 7 charged DeGeratto with receiving stolen goods in violation of 18 U.S.C. Sec. 659. DeGeratto pled not guilty to all counts, but was convicted by the jury on each. 1
In the words of the government, it presented voluminous evidence of the existence of an alleged conspiracy between DeGeratto and others for the purpose of stealing and selling truckloads of food products.
The others later became government witnesses against DeGeratto. According to government witnesses, on December 17, 1982, Eddie Kenton Rains and Lummie Crawford stole a truck from a Union 76 truck stop in Sawyer, Michigan. The truck contained a cargo of 1,326 turkeys, which had an approximate value of $18,620.85. Prior to leaving the truck stop, Rains telephoned George Perry to inquire whether Perry could fence the stolen turkeys. Perry, in turn, contacted Alix Douyon. Douyon then allegedly contacted DeGeratto. According to Douyon, DeGeratto had previously indicated that he was in the market for stolen goods that he could sell through his stores, the Buddy Bear Food Centers.
"Buddy Bear" is the nickname of DeGeratto which he also used as his business name. There were three Buddy Bear Food Centers in the Chicago, Illinois area. DeGeratto was not, however, the actual owner of the stores. They were owned by the Loren Corporation, of which Loren Stern was the sole shareholder. DeGeratto, through his Buddy Bear Management Company, and by agreement with the Loren Corporation, managed the three stores. The meat departments in each were operated as concessions. Loren Corporation received 19% of the gross meat sales for its services to the concessionaires. Gerald Piazzi was the Loren Corporation's meat buyer and in that capacity purchased meat for the concessionaires. Upon receipt of a meat invoice, the concessionaire signed the invoice acknowledging receipt of the meat and then submitted it to the Loren Corporation's bookkeeper to draw a check payable to the supplier. Thereafter, Piazzi would review the invoices and checks, approve them, and give them to DeGeratto for signature. The concessionaires received weekly reports from the bookkeeper showing gross meat purchases, sales and other expenses.
Government witnesses painted the following picture of DeGeratto's supposed involvement in the stolen meat transactions. When DeGeratto received the turkey call from Douyon he asked when the turkeys had been stolen. Douyon told DeGeratto that he would have to call Perry for the information. After speaking with Perry, Douyon called DeGeratto back and told him that the "merchandise was just taken." A price was agreed upon. DeGeratto instructed Douyon to call Piazzi and make arrangements for delivery of the turkeys. Douyon called Piazzi and arrangements were made for delivery to the Roosevelt Road store at approximately 7:00 a.m. the next morning. Piazzi then called DeGeratto to confirm that Piazzi had made the deal with Douyon. DeGeratto arranged to have Jerry Hubbard, who was in charge of the safe at the Roosevelt Road store, give Piazzi approximately $4,000 to $6,000 from the safe so that Piazzi could pay the thieves. DeGeratto instructed Piazzi to pay the thieves "half now and half later" so that if he, DeGeratto, got caught with the stolen goods he would only lose half his money. DeGeratto and Piazzi had previously discussed buying stolen goods from Douyon to sell in the stores. DeGeratto had told Piazzi "that they could both make a lot of money on this," but that if they got caught to say nothing.
The following morning Rains and Crawford drove the truck to the Roosevelt Road store. Several people were there, including Douyon, Perry and Piazzi. As soon as the truck arrived the turkeys were unloaded. Piazzi received a bag of money from Hubbard which he then gave to Perry. Perry used the money to pay Douyon, Rains and Crawford. Perry then instructed Rains and Crawford to abandon the truck. They did so at the Water Street Market, approximately 10 to 15 blocks from the Roosevelt Road store. A few days later Perry came to see Piazzi at the Chicago Avenue store, and Piazzi, as instructed by DeGeratto, paid Perry an additional $4,000 to $6,000. DeGeratto also allegedly instructed Piazzi to prepare false invoices to make it appear as if the store had purchased the turkeys from legitimate vendors. Piazzi was further instructed to use a fictitious company as vendor. That name was then placed on the invoices. The amount indicated as owing to the fictitious company was the going rate for turkeys. Piazzi prepared the invoices and placed them with that week's
legitimate invoices so that the bookkeeper, not knowing of the scheme, would prepare a check for each of the three Buddy Bear stores for payment to the fictitious company. After the bookkeeper had prepared the checks, Piazzi took them to DeGeratto. DeGeratto told Piazzi to have Hubbard cash the checks. Hubbard did so and gave Piazzi the money minus the amount which Hubbard had removed from the safe for payment to the thieves. Hubbard repaid that amount to the safe. Piazzi took the cash to DeGeratto who paid him back approximately $2,000 to $3,000.
On April 30, 1983, Rains again stole a truckload of food products, this time with the assistance of Ron Dowden. The truck contained pork and processed meats having a combined approximate value of $53,805.53. The theft took place at Tomenko's Truck Stop in Michigan City, Indiana. Once the truck was spotted, Rains telephoned Perry to come to the truck stop. Perry did so and upon arriving examined the bill of lading to ascertain what cargo the truck was transporting. Once Perry realized that the truck contained meat, he telephoned Douyon in an effort to sell the load. According to government witnesses, DeGeratto was also involved in this second stolen meat transaction. Douyon called DeGeratto and assured him that the load had been stolen only the day before. DeGeratto then instructed Douyon to make arrangements with Piazzi to have it delivered. Douyon then spoke to Piazzi and Perry and made arrangements for the load to be delivered to the Roosevelt Road store the following morning. Piazzi allegedly called DeGeratto to verify that DeGeratto and Douyon had made the deal. According to Piazzi, DeGeratto instructed Piazzi to do everything in the same manner as for the first transaction, including getting the money from Hubbard. In the morning Rains and Dowden transported the truck to the Roosevelt Road store. Among those present at the store were Perry, Douyon and Piazzi. After the truck was unloaded, Piazzi again received a bag of money from Hubbard and gave it to Perry as half payment, with the other half to be paid within a few days. Perry used the money to pay Rains, Dowden and Douyon. As in the first transaction, Perry kept all of the money for himself from the second payment which he received from Piazzi a few days later. Once the truck was unloaded, Rains and Dowden abandoned it in the same area as the first time. Piazzi, again allegedly pursuant to DeGeratto's instructions, prepared fictitious invoices and proceeded in the same manner as in the first transaction. After Hubbard cashed the checks, Piazzi claimed he took the money to DeGeratto who paid him approximately $2,000 to $3,000.
On June 15, 1984, Rains assisted James Hurley in stealing a truckload of food products from the Travel Lodge Motel in Gary, Indiana. The truck contained 1,415 boxes of assorted meat products that had an approximate total value of $58,790.14. Rains, in an effort to sell the load after the theft, called Pierre Romeus, whom he knew to deal in stolen goods. Romeus telephoned Piazzi who in turn allegedly called DeGeratto. Piazzi testified that he told DeGeratto what type of food Romeus had and that DeGeratto instructed Piazzi to make the deal and to proceed as he had in the first two transactions. Piazzi told Romeus that although it was Thursday or Friday, the store would not take delivery of the goods until Monday morning. On Sunday night Rains and Hurley drove the truck from Indiana into Illinois. Once in Illinois they stopped in a parking lot to remove a padlock from the back of the truck. FBI agents had been surveilling the truck and arrested both men. On Monday morning when the truck did not arrive at the store, Piazzi called Romeus. Romeus told him that there was a small problem--the FBI was involved. Shortly thereafter Piazzi claimed that he told DeGeratto what had occurred, and that DeGeratto instructed Piazzi not to tell the FBI anything.
At trial the government called, among others, participants Rains, Dowden, Hurley, Perry, Douyon and Piazzi who testified pursuant to...
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