U.S. v. DeVincent, s. 76-1224

• Decision Date: 08 December 1976
• Docket Number: Nos. 76-1224,76-1225,s. 76-1224
• Citation: 546 F.2d 452
• Parties: 1 Fed. R. Evid. Serv. 1237 UNITED STATES of America, Appellee, v. Richard DeVINCENT a/k/a Vinnie, Appellant. UNITED STATES of America, Appellee, v. Robert VISCONTI, Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 452

546 F.2d 452

1 Fed. R. Evid. Serv. 1237

UNITED STATES of America, Appellee, v. Richard DeVINCENT a/k/a Vinnie, Appellant.

UNITED STATES of America, Appellee, v. Robert VISCONTI, Appellant.

Nos. 76-1224, 76-1225.

United States Court of Appeals,

First Circuit.

Argued Sept. 15, 1976.

Decided Dec. 8, 1976.

Brian J. McMenimen, Boston, Mass., for Robert Visconti, appellant.

Stephen M. Salon, Boston, Mass., with whom Salon, Silver, McCabe & Sidel, Boston, Mass., on brief for Richard DeVincent, appellant.

Dennis A. Winston, Atty., Dept. of Justice, Washington, D.C., with whom James N. Gabriel, U. S. Atty., Martin Boudreau, Sp. Atty., Justice Dept., Boston, Mass., and Mervyn Hamburg, Atty., Dept. of Justice, Washington, D.C., on brief for appellee.

Before COFFIN, Chief Judge, CLARK ^*, Associate Justice, U.S. Supreme Court (Ret.), and CAMPBELL, Circuit Judge.

COFFIN, Chief Judge.

The appellants were convicted of conspiring to make, and of making, an extortionate extension of credit in violation of 18 U.S.C. § 892(a). The statute is a recent one, aimed at "loan sharks". Several of the issues raised by appellants revolve around the definition of an "extortionate" extension of credit. 18 U.S.C. § 891(6) states that

"(a)n extortionate extension of credit is any extension of credit with respect to which it is the understanding of the creditor and the debtor at the time it is made that delay in making repayment or failure to make repayment could result in the use of violence or other criminal means to cause harm to the person, reputation, or property of any person."

Recognizing that it might be hard to prove the "understanding of the creditor" directly, Congress declared in 18 U.S.C. § 892(b) that "if it is shown that all the following factors were present in connection with the extension of credit in question, there is prima facie evidence that the extension of credit was extortionate . . . ." Congress then listed four factors: that repayment is unenforceable through civil judicial processes; that the loan requires interest greater than 45 per cent a year; that the loan, added to the borrower's existing debts to the same lender exceeds $100; and that the debtor reasonably believes either that the lender has used extortion to collect other debts or that the lender has a reputation for doing so.

The appellants argue that the district court improperly construed these provisions when it instructed the jury in the following language:

"I want to tell you there are two ways in which the government can prove the extensions of credit were extortionate, if you find the extensions of credit were made: The government can prove extensions of credit were extortionate either by direct evidence of the actual belief of Pallotta as to the defendants' collection practices or by establishing the following four facts:" (The court then paraphrased § 892(b).)

Appellants object that in outlining the first method of proof, the judge should have referred to the creditor's understanding that violence would be used to collect the loan. To prevail with this argument, they must show that the omission was plain error, for they made no objection when the instruction was given. F.R.Crim.P. 52(b). We agree that the statute makes the understanding of both the creditor and the debtor crucial to proving a substantive violation of this section. Cf. United States v. Annoreno, 460 F.2d 1303, 1310 (7th Cir.), cert. denied, 409 U.S. 852, 93 S.Ct. 64, 34 L.Ed.2d 95 (1972). We do not, however, believe that this instruction was plain error. Read as a whole, the charge to the jury conveyed the statute's requirements. At several earlier points in his instruction the judge properly charged that the government must prove the creditor's understanding. He talked of the "mutual understanding" of creditor and debtor, and of an "understanding between" the two. ¹ Twice he repeated the statutory definition found in § 891(6). ² The judge's later lapse was, therefore, a harmless one. Particularly is this so when we consider the context of the remark: the court mentioned the "direct" method of proof under § 891(6) only as an introduction and contrast to the less direct route provided by § 892(b).

Appellants also find error in the second part of the quoted passage, which is based on § 892(b). Their broadest ground is the unconstitutionality of the presumption ³ that these four factors show the loan to have been extortionate. There are constitutional limits on the use of presumptions in the criminal law. Tot v. United States, 319 U.S. 463, 467-68, 63 S.Ct. 1241, 87 L.Ed. 1519 (1943); Leary v. United States, 395 U.S. 6, 29-44, 89 S.Ct. 1532, 23 L.Ed.2d 57 (1969). But the presumption created by § 892 does not transgress those limits. When a man with a reputation for violent collection tactics loans more than $100 at an exorbitant rate of interest, and the loan cannot be collected by legal means, we think it highly probable that the loan is "extortionate" within the meaning of § 892. Under either a rational connection or a reasonable doubt standard, the statutory presumption survives, for a juror presented with these basic facts could surely find the presumed fact beyond a reasonable doubt. Cf. Turner v. United States, 396 U.S. 398, 416, 90 S.Ct. 642, 24 L.Ed.2d 610 (1970); Barnes v. United States, 412 U.S. 837, 843, 93 S.Ct. 2357, 37 L.Ed.2d 380 (1973).

Finally, appellants challenge the way in which the trial judge interpreted § 892. The court's instruction that the government "can prove" the loan extortionate by establishing the basic facts, they argue, may have misled the jury into thinking that its autonomy was limited. In fact, the jurors were free to ignore the presumption, even if they believed that the four basic facts had been proved. We agree that the judge's language was unfortunate; it would have been better to let the jury draw its own conclusions from the evidence without any prompting from Congress or the court. And if the presumption had been mentioned at all, the jury should have been told that they were not bound by Congress's determination (although the basis of Congress's determination could have been explained). United States v. Gainey, 380 U.S. 63, 85 S.Ct. 754, 13 L.Ed.2d 658 (1965); United States v. Crespo, 422 F.2d 718 (2d Cir.), cert. denied, 398 U.S. 914, 90 S.Ct. 1716, 26 L.Ed.2d 77 (1970). Nonetheless, the court was technically correct in saying that the government "can" prove its case against the appellants by establishing the four factors of § 892(b); we have already pointed out that finding these factors would justify a guilty verdict. Moreover, unlike the instruction in United States v. Gainey, supra, the judge's charge did not impinge on the appellant's Fifth Amendment privilege. Finally, taking the instruction as a whole, we do not think that this passage reduced the jurors' awareness of their responsibilities and discretion. Before the disputed remarks, the court had clearly set forth the "essential elements" of the crime, ⁴ and within minutes after the disputed remarks, the court repeated that the jury had a duty "to determine whether the government has proven what I told you were essential elements beyond a reasonable doubt."

The next error that the appellants find in the instructions is the statement that "(i)t is only necessary that the government prove that there will be a reasonable basis on which the borrower Peter Pallotta, could have based his fear that default or delinquency on his part could result in harm to him." Out of context, these words could be error, for they seem to permit a conviction if the debtor had reasonable grounds for expecting violence even if the debtor had no subjective expectation of violence. However, the judge did introduce a subjective element into the charge by speaking of "his" fear rather than "a" fear. The context further neutralizes any danger of misinterpretation. The preceding sentence was: "I want to instruct you . . . that the existence of explicit threats is not required in order for the government to prove the victim's understanding that there was a possibility of harm to him if he didn't make his payments." The judge was merely contrasting...