U.S. v. Long

• Decision Date: 19 October 1990
• Docket Number: 999,Nos. 998,D,s. 998
• Citation: 917 F.2d 691
• Parties: 135 L.R.R.M. (BNA) 2812, 117 Lab.Cas. P 10,417, RICO Bus.Disp.Guide 7609, 31 Fed. R. Evid. Serv. 526 UNITED STATES of America, Appellee, v. John F. LONG and John S. Mahoney, Defendants-Appellants. ockets 89-1227, 89-1392.
• Court: U.S. Court of Appeals — Second Circuit

Page 691

917 F.2d 691

135 L.R.R.M. (BNA) 2812, 117 Lab.Cas. P 10,417,

RICO Bus.Disp.Guide 7609,

31 Fed. R. Evid. Serv. 526

UNITED STATES of America, Appellee, v. John F. LONG and John S. Mahoney, Defendants-Appellants.

Nos. 998, 999, Dockets 89-1227, 89-1392.

United States Court of Appeals, Second Circuit.

Argued March 28, 1990.

Decided Oct. 19, 1990.

Colleen P. Cassidy, The Legal Aid Soc., New York City, for defendant-appellant John F. Long.

Lawrence M. Stern, New York City, for defendant-appellant John S. Mahoney.

Joan McPhee, Asst. U.S. Atty., S.D.N.Y. (Otto G. Obermaier, U.S. Atty., S.D.N.Y., Jonathan Rosenberg, Asst. U.S. Atty., of counsel), for appellee.

Before OAKES and WINTER, Circuit Judges, and MUKASEY, ^* District Judge.

WINTER, Circuit Judge:

Appellants John F. Long and John S. Mahoney were Teamsters officials in New York City who allegedly misused their offices for private profits. After a twelve-week jury trial before Judge Edelstein, they were convicted of participating in and conspiring to participate in a racketeering enterprise in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. Secs. 1962(c) and (d) (1988), and a variety of other substantive crimes connected with or arising out of the racketeering activity.

Appellants raise numerous issues, including errors in instructions to the jury, improper

                admission of unsealed surveillance tapes and hearsay evidence on those tapes, improper admission of expert testimony on organized crime, insufficiency of evidence on various counts, improper questioning of character witnesses using hypothetical questions assuming the guilt of the defendants, and judicial bias. 1   The district court's instructions regarding the pattern element of RICO, while proper at the time they were given, were not consistent with an intervening decision of this court and were not harmless error.  We also agree that instructions regarding the testimony of Long's wife were erroneous and that the district court improperly admitted prejudicial expert testimony regarding organized crime families.  Finally, the questioning of character witnesses in the form of hypothetical questions assuming the guilt of the defendants was improper.  Accordingly, we reverse
                

BACKGROUND

Appellants were indicted in 1988 on charges of participating in a racketeering enterprise by committing and agreeing to commit numerous crimes between 1978 and 1987. The enterprise alleged was an association in fact consisting of Long, Mahoney, Jesse David Hyman, Vincent Joseph Rotondo, and "others to the Grand Jury known and unknown." Both appellants were charged with conspiring to participate in (Count I) and participating in (Count II) the racketeering enterprise in violation of RICO, 18 U.S.C. Secs. 1962(c) and (d).

The indictment contained ten other counts alleging substantive offenses, including extortion, filing false tax returns, perjury and false statements under oath. Because the claims of error implicate the statute of limitations and the prejudicial effect of certain rulings, a fairly detailed description of the evidence is necessary.

The government's proof focused on the criminal activities of Hyman, a dentist who was convicted of extortion and loansharking in 1985 and thereafter became the government's key witness in this case. Hyman testified that he had previous associations with various organized crime families in Buffalo, paying the families a percentage of profits on union dental care plans that Hyman set up with the backing of the families. When he moved his criminal activities to the New York area, Hyman developed a relationship with Rotondo, a member of the DeCavalcante organized crime family in New Jersey.

In 1979, Rotondo arranged for a contractor, Ben Parness, with whom Rotondo had an extortionate relationship described infra, to introduce Hyman to Long, the Secretary-Treasurer of Teamsters Local 804 in New York City. Hyman indicated to Long that he was a partner of Rotondo, and Rotondo attended a few meetings between Hyman and Long. Hyman proposed a dental plan for Long's union and requested that Long suggest other Teamsters locals that might be interested in dental plans or pension funds.

Long thereafter introduced Hyman to Mahoney, who was Secretary-Treasurer of Teamsters Local 808. Hyman reported to Rotondo and Rotondo's superior John Riggi, then acting boss of the DeCavalcante family, that Mahoney was willing to discuss business together. Rotondo responded, "[i]f you could do it, God bless you. Nobody has been able to move Mahoney up until now." Hyman told Mahoney that Hyman and Rotondo were partners. Hyman testified, however, that Mahoney emphasized that he intended to do business only with Hyman. Hyman shared the proceeds from the resulting criminal activities with Rotondo and Riggi.

The alleged pattern of racketeering activity, see 18 U.S.C. Secs. 1961(1) and (5), consisted of nine racketeering acts, five involving Long alone, one involving Mahoney alone, and three involving Long and Mahoney. ² All but three of the nine acts occurred Racketeering Act One, which occurred outside the limitations period, charged Long with receiving at least $2,000 in kickbacks in 1981 for arranging for Teamsters Local 804 to invest funds in Penvest, a pension fund management company. Hyman testified that he agreed to pay Long a one percent cash kickback for monies invested by Local 804 in Penvest. After Long gave Hyman a check for $100,000 for Penvest, Hyman gave Long $2,000 in cash, or a two percent kickback, to encourage Long's continuing participation in the scheme. According to Hyman, eight or nine months later, Long invested additional Local 804 money with Penvest, and Hyman gave Long $1,000 in cash.

outside the limitations period and must, under RICO, see infra, be related to at least one of the three acts within the period to be valid predicate acts.

Racketeering Act Two, also outside the limitations period, charged Mahoney with receiving kickbacks between April 1982 and February 1983 in the form of cash and a bank loan in return for investing Local 808 funds with Penvest. That Act also charged Long with aiding and abetting Mahoney's wrongdoing by persuading Mahoney to make the investment and by accepting $5,000 from Hyman for vouching for Hyman to Mahoney. According to Hyman's testimony, Hyman offered Mahoney one percent of the total of union pension fund money invested with Penvest and assured Mahoney of making $30,000 to $40,000 per year. Hyman also testified that Mahoney had stated that he needed money to renovate a new home. Hyman said that he would give Mahoney $10,000 in cash up front and enable Mahoney to get a home improvement loan for the balance.

When the first investment installment was transferred to Penvest in the spring of 1982, Hyman gave Mahoney $10,000 in cash. Hyman also paid Long $5,000 in cash for introducing Hyman to Mahoney and made cash payments to Rotondo and Riggi. In addition, Hyman testified that he arranged for Mahoney to receive a $20,000 home improvement loan from Sterling National Bank ³ and gave Mahoney approximately $700 per month in cash to cover the payments on that loan until February 1983.

Racketeering Act Three, again outside the limitations period, charged Mahoney with receiving a $5,000 cash payment in December 1982 for agreeing not to remove Local 808 funds from Penvest. Long also was charged in Act Three with aiding and abetting Mahoney's receipt of the $5,000 and with receiving $2,000 himself for his efforts to persuade Mahoney to keep the pension fund money in Penvest. During the summer of 1982, Local 808 officials had complained about Penvest's failure to provide financial reports and other documentation regarding Local 808 pension funds. In the fall, Mahoney wrote to Penvest requesting that all funds and assets belonging to the union pension fund be returned. Hyman testified that he contacted Long and asked Long to help persuade Mahoney not to withdraw the funds. Hyman testified that on December 6, 1982, he paid Mahoney $5,000 in cash and assured Mahoney that the union would get the financial reports it needed. Mahoney then indicated that the local would make an additional investment in Penvest of $100,000. Hyman testified that shortly after this matter was resolved with Mahoney, Hyman gave Long approximately $2,000 in cash. Penvest received an additional $100,000 investment from Local 808 in early 1983.

Racketeering Act Four, also outside the limitations period, charged Long with receiving kickbacks in 1981 for persuading an official in Teamsters Local 277 to invest union pension funds in American Asset Management Company ("AAMC"), another investment management fund. Hyman testified that in 1978 or 1979 he developed a relationship with various employees of a New York City brokerage house who Racketeering Act Five, also outside the limitations period, charged Long with receiving money in 1981 for assisting Emgee Pharmaceuticals, Inc., to avoid unionization. A principal of Emgee Pharmaceuticals had contacted Hyman regarding threats from AFL-CIO organizers, and Hyman sought Long's assistance in resolving the situation. Hyman testified that he later gave Long cash for appeasing the AFL-CIO organizer and for agreeing to provide Emgee Pharmaceuticals with a "sweetheart contract" between the corporation and Local 804.

would handle stock trading for pension funds managed by AAMC. Hyman and one broker agreed that they would split the broker's commissions. A one percent cash "fee" to the union people who assisted Hyman in getting the funds invested with AAMC would be covered out of the pension fund management fees. Hyman spoke with Rotondo, Long, and other union contacts to seek business for AAMC. According to Hyman, Long was instrumental in getting an officer of Teamsters Local 277 interested in AAMC, and, when Local 277 placed its pension funds with AAMC, Long received a $2,500 cash payment...