U.S. v. Fusaro, s. 82-1024

• Citation: 708 F.2d 17
• Decision Date: 26 May 1983
• Docket Number: 82-1025 and 82-1060,Nos. 82-1024,s. 82-1024
• Parties: 12 Fed. R. Evid. Serv. 2019 UNITED STATES, Appellee, v. Nunziato FUSARO, Defendant, Appellant. UNITED STATES, Appellee, v. Richard R. SACCONE, Defendant, Appellant. UNITED STATES, Appellee, v. Richard E. ROBIDOUX, Defendant, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 17

708 F.2d 17

12 Fed. R. Evid. Serv. 2019

UNITED STATES, Appellee, v. Nunziato FUSARO, Defendant, Appellant.

UNITED STATES, Appellee, v. Richard R. SACCONE, Defendant, Appellant.

UNITED STATES, Appellee, v. Richard E. ROBIDOUX, Defendant, Appellant.

Nos. 82-1024, 82-1025 and 82-1060.

United States Court of Appeals, First Circuit.

Argued Sept. 9, 1982.

Decided May 26, 1983.

Frederick S. Pillsbury, Springfield, Mass., with whom Doherty, Wallace, Pillsbury & Murphy, Springfield, Mass., was on brief, for defendant, appellant Nunziato Fusaro.

Stephen W. Silverman, Springfield, Mass., by appointment of the Court, for defendant, appellant Richard R. Saccone.

Harry C. Mezer, Boston, Mass., for defendant, appellant Richard E. Robidoux.

George F. Kelly, Sp. Asst. U.S. Atty., Springfield, Mass., with whom William F. Weld, U.S. Atty., Boston, Mass., was on brief, for appellee.

Before COFFIN, Chief Judge, SWYGERT, ^* Senior Circuit Judge and BREYER, Circuit Judge.

SWYGERT, Senior Circuit Judge.

These three consolidated appeals arise from the convictions of Nunziato Fusaro, a prominent Worcester attorney, Richard Saccone, president of Mohawk Trust and Savings Bank of Greenfield, Massachusetts ("Mohawk"), and Richard Robidoux, a businessman, on federal charges relating to a scheme that defrauded Mohawk, a small federally-insured bank. After a twenty-day trial including the testimony of more than fifty witnesses, these three men were convicted of misapplication of bank funds, 18 U.S.C. Sec. 656 (1976), unauthorized issuance of checks, id. Sec. 1005, false entries in bank books, id. Sec. 1005, false statements on promissory notes, id. Sec. 1014, and conspiracy to commit these offenses and to defraud the Federal Deposit Insurance Corporation ("FDIC"), id. Sec. 371. We affirm.

The defendants raise numerous objections, and brevity will be served by joint treatment of their common objections. Following the presentation of the facts in Part I, we consider Fusaro's and Saccone's objections to the sufficiency of the evidence in Part II. Part III discusses Fusaro's and Saccone's objections to the jury instructions. In Parts IV and V, we treat, respectively, Fusaro's and Robidoux's remaining objections.

I

It is unnecessary to recount the voluminous evidence presented and we report here only the gist and some of the highlights of the case. In October 1979 Robidoux, a ten-year client of Fusaro, was in financial trouble. The principal lender to United Chevrolet ("United"), a General Motors dealership owned by Robidoux, denied further credit to United and demanded repayment of existing loans. United owed General Motors Acceptance Corporation approximately $825,000, and Robidoux owed Fusaro substantial sums for legal services. Robidoux had other debts, clamoring creditors, and other assets.

Saccone became president of Mohawk in August 1978. Shortly thereafter, an attorney employed by Fusaro became Mohawk's legal counsel. Mohawk is a small bank, capitalized at $300,000, and pursuant to Mass.Gen.L. ch. 172, Sec. 54(A), subs. (b), Mohawk's lending limit to any one person was $60,000. Saccone was authorized to grant secured and unsecured loans of $10,000 prior to approval of Mohawk's Executive Committee.

The financial bleeding of Mohawk took place on several fronts. First, without prior approval of Mohawk's Executive Committee, Saccone authorized a $50,000 unsecured loan to Robidoux and a $50,000 secured loan to United. Mohawk had had no prior dealings with Robidoux or United, and no credit checks were performed. After the loans were authorized, Fusaro furnished the supporting credit information which omitted substantial liabilities of Robidoux. Of this initial $100,000, Fusaro kept half, crediting the funds to Robidoux's debts to Fusaro.

Second, in a two-week period Saccone authorized thirteen loans, without prior Executive Committee approval and without credit checks, to individuals who did not know they were becoming indebted to Mohawk. Some of these individuals had consented to help Robidoux obtain loans from Mohawk, but they had not consented to become debtors of Mohawk. The supporting financial information, some of which was materially false, was prepared in large part by Fusaro, although Robidoux, without authorization, signed the names of these borrowers to the documents. These loans, totalling some $620,000, went to Fusaro's or Robidoux's benefit. When the loans became due, the debt was extended, without prior approval by Mohawk's Executive Committee, by a virtually worthless third mortgage on some of Robidoux's assets, and with secured notes from friends of Robidoux who were told that Robidoux would be responsible for repayment. The evidence indicates Saccone was aware of these assurances.

Third, as a financial basis for Mohawk's increased lending activity, Fusaro and Robidoux arranged for the temporary opening of fourteen accounts and $400,000 in fund transfers to Mohawk. The evidence indicates Saccone knew these were temporary fund transfers. One such account was opened in Fusaro's law office. Most of these funds were withdrawn a few weeks after they were deposited.

Fourth, as the house of cards began to fall, other desperate steps were taken. Fusaro arranged for the transfer of Robidoux's house to Fusaro's sister-in-law. Fusaro arranged to buy out Mohawk's $50,000 loan to Robidoux through a deal involving the assignment of the note to Fusaro's sister-in-law, using a check from Fusaro's nephew. Other actions were taken which need not be recounted. Mohawk's records are neither accurate nor complete. The entire episode lasted only a few months, from November 2, 1979, to February 15, 1980, when Mohawk was closed and the FDIC liquidator took over. Robidoux and United filed for bankruptcy a month later.

All three defendants testified. Robidoux claimed he signed the names because his lawyer, Fusaro, told him to do so. Saccone claimed that he was duped by Fusaro, who, in Saccone's view, was Mohawk's lawyer. Fusaro claimed he knew nothing about the fraud, and, when he found out, he took steps to ensure that Robidoux paid back the money.

II

Fusaro's and Saccone's challenge to the sufficiency of the evidence focuses primarily on evidence concerning knowledge and intent. Viewing the evidence as a whole, with all reasonable inferences drawn in a light most favorable to the government, Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942); United States v. Patterson, 644 F.2d 890, 893 (1st Cir.1981), we find no merit in either defendant's objection. ¹

Both defendants rely upon United States v. Gens, 493 F.2d 216, 221-23 (1st Cir.1974). It is clear, however, from Gens that the sine qua non of charges of willful misapplication of bank funds is action taken with the knowledge of harm to, intent to harm, or reckless disregard for, the financial health of the bank. In Gens no such showing was made. Here, however, it is a fair inference that the loans at issue were made, at the very least, with a conscious disregard of a substantial and unjustifiable risk of injuring Mohawk. The crimes here, after all, concerned over $600,000 in loans for the benefit of one uninvestigated debtor by a very small bank.

Saccone's undisputed lies about the loans to various examiners, bank officials, bank employees, and debtors, as well as his failure to comply with Mohawk policies and state regulations create a more than substantial basis for the inference that he acted with the requisite knowledge and intent. It is no answer, as Saccone asserts, that he lacked motive because he was not financially enriched by the scheme. Motive is not synonymous with intent.

Fusaro's active participation in so many aspects of the scheme as well as his attempts to cover up the scheme as it unravelled, likewise, provides the basis for the inference that he acted with the requisite intent and knowledge. As to the fraudulent bank record entries, Fusaro's lack of knowledge of the specific entries is no defense. Once Fusaro's membership in the conspiracy is established, he is legally responsible for his co-conspirators' steps taken in furtherance of the objects of the scheme. Pinkerton v. United States, 328 U.S. 640, 66 S.Ct. 1180, 90 L.Ed. 1489 (1964).

Saccone asserts that the evidence was insufficient to prove him guilty of conspiracy because he met Robidoux only once, well after the initiation of the scheme, and did not know Fusaro well. The short answer to this claim is that a party to a conspiracy need not even know the identity of his co-conspirators. United States v. Middlebrooks, 618 F.2d 273, 278, modified on other grounds, 624 F.2d 36, 37 (5th Cir.1980) (per curiam). The long answer is that it is undisputed that Saccone knew Fusaro and knew who Robidoux was and knew Robidoux was the true beneficiary of the loans Saccone authorized.

Saccone's assertion that the evidence was insufficient because the government failed to prove Mohawk was a federally-insured bank is, likewise, meritless. Saccone conceded the issue in his opening remarks, and two FDIC employees' and a State Banking Commissioner's testimony all indicated the bank was federally insured. Our review of the record indicates that Mohawk's status as a federally-insured bank could be easily inferred from this testimony. This case is unlike United States v. Bliss, 642 F.2d 390 (10th Cir.1981), in which the trial judge set aside guilty verdicts on the ground that there was no evidence the bank was a member of the Federal Reserve, and the appellate court agreed that the bank's status was not inferentially established. Id. at 391.

III

We turn next to Saccone's and Fusaro's objections concerning jury instructions. The underlying facts are not clearly presented by the parties. The trial judge requested submission of proposed jury instructions prior to the commencement of trial on October 19, 1981. On November 12 the government submitted a lengthy memorandum in support of...