U.S. v. Gio, s. 92-1689

• Citation: 7 F.3d 1279
• Decision Date: 13 October 1993
• Docket Number: 92-1690,Nos. 92-1689,s. 92-1689
• Parties: 39 Fed. R. Evid. Serv. 834 UNITED STATES of America, Plaintiff-Appellee, v. Nicholas GIO and Joseph Marchiafava, Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 1279

7 F.3d 1279

39 Fed. R. Evid. Serv. 834

UNITED STATES of America, Plaintiff-Appellee, v. Nicholas GIO and Joseph Marchiafava, Defendants-Appellants.

Nos. 92-1689, 92-1690.

United States Court of Appeals, Seventh Circuit.

Argued Feb. 16, 1993.

Decided Oct. 13, 1993.

Barry R. Elden, Asst. U.S. Atty., Pamela Pepper, Asst. U.S. Atty. (argued), Office of the U.S. Atty., Criminal Receiving, Appellate Div., Chicago, IL, for U.S. in No. 92-1689.

Sharon G. Kramer (argued), Chicago, IL, for Nicholas Gio in No. 92-1689.

James P. Fleissner, Barry R. Elden, Asst. U.S. Attys., Pamela Pepper (argued), Asst. U.S. Atty., Office of the U.S. Atty., Criminal Receiving, Appellate Div., Chicago, IL, for U.S. in No. 92-1690.

Raymond D. Pijon (argued), Chicago, IL, for Joseph Marchiafava in No. 92-1690.

Before CUMMINGS and COFFEY, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

COFFEY, Circuit Judge.

A jury convicted defendants Joseph Marchiafava and Nicholas Gio of one count of conspiracy to commit arson in violation of 18 U.S.C. § 371, and three counts of traveling in interstate commerce to promote or carry on unlawful activity in violation of 18 U.S.C. § 152. Both defendants were sentenced to sixty-three months imprisonment and three years probation following completion of their sentences. The court also ordered Marchiafava and Gio each to pay $65,509.92 in restitution to Capital Indemnity Insurance Corporation, the insurer of the torched building, and each pay a $200.00 special assessment. The defendants appeal their convictions and sentences. We vacate the order of restitution entered against Gio and remand, but in all other respects affirm the defendants' convictions and sentences.

I. BACKGROUND

A. Facts

Defendant Marchiafava, Gio, Thomas De Roy, and Leo Kelly's indictment and convictions arose as a result of their conspiratorial acts in torching a bar named "The Country Pub" (hereinafter "the bar") located in Walworth County, Wisconsin. In 1985, Wisconsin businessman De Roy sold the bar to Kelly for $120,000. Kelly borrowed $42,000 from a local bank to finance the deal and was obliged to pay the remainder of the sale price directly to De Roy pursuant to their written contract. A subordination agreement with the bank provided that De Roy was responsible for making Kelly's mortgage payments in the event Kelly defaulted on the loan. Shortly after the deal closed, Kelly defaulted on the mortgage loan and was also unable to make his payments to De Roy.

De Roy had been acquainted with Marchiafava for approximately four years. During the four years of De Roy's acquaintance with Marchiafava, he had placed bets with Marchiafava and also had loaned Marchiafava approximately $100,000. Marchiafava borrowed the money to pay off his own substantial gambling debts with some of the upper-echelon bookmakers in Chicago. Marchiafava also owed approximately $80,000 in gambling debts to a Chicago bookmaker named James Bollman, who had sent a minion named James LaValley to demand payment from Marchiafava in early 1988.

In November of 1987, Marchiafava attempted to borrow more money from De Roy in addition to the amount already owed to forestall the aggressive debt collection efforts of his Chicago creditors. Beset by his own dire financial straits created by Kelly's default and Marchiafava's failure to repay earlier loans, De Roy responded that he had no money to lend. Marchiafava then suggested that setting fire to the bar might be the solution to their financial woes. Marchiafava proposed that in exchange for the $42,000 loan, he would use his Chicago connections to locate an arsonist. Because the insurance money would be paid out in Kelly's name, De Roy met with Kelly to bring him into the scheme.

After meeting with De Roy and Marchiafava, Kelly reluctantly agreed to participate. Marchiafava subsequently contacted Bollman, and requested his assistance in locating an arsonist. In December 1987, Marchiafava, De Roy, and Kelly traveled to Chicago to meet with Bollman. Once in Chicago, Kelly went to a restaurant while Marchiafava and De Roy went to a club and met with Bollman. Marchiafava handed Bollman an envelope filled with cash, and reminded Bollman to set up the meeting with the arsonist. After the meeting, De Roy increased the insurance on the bar from $120,000 to $140,000.

Bollman thereafter provided Marchiafava with the phone number of an arsonist. Marchiafava arranged a strategy meeting for the arson with De Roy and the arsonist, Gio, at a bar in Lake Geneva, Wisconsin. De Roy came to the meeting with only $3,000 of the $12,000 arsonist performance fee. Marchiafava offered to contribute $6,000 towards the arsonist's fee if De Roy came up with the remainder. Gio stated that he refused to set the fire until he received the $12,000 in cash. The conspirators held from five to ten meetings and conversations before all the details of the arson were worked out.

LaValley, Bollman's debt collector, was also a friend of Gio. LaValley testified at trial that he had indoctrinated the younger Gio in the customs of the underworld. When LaValley learned that Gio had been hired by Marchiafava to torch a bar, he wanted a piece of the action. After gaining permission from the Chicago mobsters to take part in the arson, LaValley agreed to share his expertise in such matters for $20,000. After reconnoitering the proposed arson target and receiving a $10,000 advance payment, LaValley obtained a phosphorous grenade from his immediate superior, Mario Rainone. On February 21, 1988, Gio and LaValley burned down the Country Pub with the grenade after LaValley checked the premises to see that the bar was empty. LaValley and Gio subsequently obtained an additional $5,000 from Marchiafava, and established a payment plan for the remainder of their fee.

The fire department investigation revealed that the cause of the fire was arson. Based on the fire department's investigation indicating arson the bar's insurer refused to pay under the policy, and led to an investigation by the Federal Bureau of Investigation ("FBI"). The Bureau contacted De Roy and he agreed to cooperate with the FBI and on February 6, 1991, he tape-recorded a telephone call to Marchiafava from the United States Attorney's office. During the conversation, Marchiafava implicated both himself and Gio in the arson. On the following day, De Roy engaged Marchiafava in another tape-recorded conversation again dealing with the Lake Geneva arson (hereinafter both conversations referred to as "De Roy-Marchiafava conversations"). Subsequently the FBI contacted Marchiafava and asked him to come to Chicago for an interview. During his March 18, 1991, meeting in Chicago with FBI agents, Marchiafava gave a statement (hereinafter "Marchiafava confession") inculpating himself, Kelly, De Roy, Bollman, and Gio.

Due to the insurance company's refusal to pay it became impossible for Marchiafava to pay his gambling debts to Bollman. Several months after the fire, Bollman used violence and the threat of dismemberment to increase the pressure on Marchiafava to pay his gambling debts. Marchiafava's wife testified that LaValley, Bollman's debt collector, called Marchiafava's home several times to remind Marchiafava of his debt obligations. When LaValley was unable to contact Marchiafava, he made threatening phone calls to Marchiafava's wife after identifying himself as "Jim Jr." LaValley allegedly threatened Mrs. Marchiafava that her husband, who had only one arm, would lose his other arm "or worse" if the debts were not promptly paid. During his testimony at trial, LaValley denied that he ever threatened Mrs. Marchiafava.

LaValley had been an enforcer for Bollman since 1989. Prior to his employment with Bollman, LaValley had been a member of an organized crime "street crew" engaged in extortion and juice loan debt collections. LaValley had a varied apprenticehood for his life of crime: by age 27 he had participated in more than fifty burglaries, had been a golf hustler, and had even had a brief stint as an electrical contractor. LaValley testified that he abandoned his pursuit of a legitimate livelihood when he was given the opportunity to earn money by threatening unsuccessful bettors with broken limbs, stabbing, beheading, and other forms of death and mayhem. LaValley also testified that aside from the violence and threats of violence directed at juice loan debtors, he had the duty of calling up legitimate businessmen and threatening to kill them or their families if they did not contribute large sums of protection money. LaValley boasted and made clear that there were only three ways to avoid him: to shoot him, to run away, or to contact the police. LaValley testified that he took precautions against the first eventuality, and his anger mounted if his victims chose either of the remaining options.

Carol Marchiafava, Marchiafava's wife, and his daughter, Debora Ann Harris, both testified that two men came to Marchiafava's house on April 22, 1988, several months after the arson. Carol Marchiafava later identified the visitors as Bollman and LaValley. The two men grabbed Marchiafava, took him into a bedroom, and ordered Marchiafava's wife and daughter out of the room. One of the men prevented Carol Marchiafava from following through on her threat to telephone the FBI. Harris followed her mother's advice and exited the home.

Approximately half an hour later, Bollman and LaValley departed. Harris returned to the house and discovered that as a result of the beating, her father had blood running from his mouth and nose, and that his face was marked by a handprint. LaValley testified that he had slapped Marchiafava on the head several times and warned him to come up with the money owed within a week. Five or six days later, Marchiafava and his wife left the state and went undercover and traveled around the country for eight months in an attempt to elude LaValley. Eventually they returned to...